

Digital Discrimination:  The Case of Airbnb.com [pdf] - 001sky
http://www.hbs.edu/faculty/Publication%20Files/14-054_e3c04a43-c0cf-4ed8-91bf-cb0ea4ba59c6.pdf

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ryan_j_naughton
I'm glad that someone is doing this analysis. That being said -- their methods
are not quite sound.

1\. Their sample has 3752 observations, of which black hosts account for 7%
(~260 obs). Given that the group of interest is a relatively rare event or
outlier, it would be better to not compare them to the entire population using
standard OLS regression models. Instead, a matching solution (e.g. propensity
score matching) would be a better solution so a more representative group
would be constructed that matches the black hosts.

Despite the regression attempting to control for this to some degree by
including the other observable variables, the regression model is attempting
to fit to all the observed prices. Given that the majority of the listings
aren't black hosts not likely to be suitable matches to the black hosts, the
fit isn't most representative of that relationship.

2\. They don't include the adjusted R-squared value for their regressions;
thus, we don't know how much of the price variance is really being accounted
for.

3\. They conclude that by including other observables available to customers
on Airbnb (like the location rating), that they have removed omitted variable
bias. Let's take the 'location rating' as an example of how this is
problematic. When I book in Airbnb, I may initially sort by Airbnb's metrics;
however, once I find a short list of matching options, I drill down into them
to try and determine how well they fit my needs. This additional consumer
analysis isn't accounted for by the high level Airbnb metrics, yet I bet it is
a primary driver in users booking with one listing over another.

Despite this, I still think it is a good paper to start this analysis. They
are likely correct that there is discrimination in Airbnb, and their logic
underpinning this is sound.

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kazagistar
This is somewhat off topic, but I found the typography of this paper to be
really really horrible. Maybe I am just used to the nice latex templates that
journals use, but something about this (maybe the extra spacing between
lines?) makes it really hard to read.

