Black Ownership Matters: Does Revealing Race Increase Demand For Minority-Owned Businesses?
Is there consumer demand to support Black-owned businesses? To explore, we investigate the impact of a new feature on a large online platform that made the race of a set of Black business owners salient to customers. We find that this feature substantially increased demand for Black-owned businesses - in the form of more calls to the restaurant, more delivery orders, and - using cell phone data from a different platform - more in person visits to the restaurant. New customers to Black-owned businesses were more likely to be White customers - suggesting demand among White restaurant goers for Black-owned businesses. The gains for Black-owned businesses vary across geographically fine-grained measures of racial prejudice: we observe larger gains in areas with less anti-Black bias, as measured by implicit association tests. We also find suggestive evidence that the effects are stronger in predominately White, Democratic-leaning areas.
We thank Jesse Shapiro, Andrei Shleifer, and seminar participants at Bentley University, Harvard Business School, Johns Hopkins University, the Joint Digital Economics Seminar, and Washington University for valuable feedback. Yelp provided data for this project. I have done consulting for tech companies, including Yelp. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
I was employed as an Economics Research Intern at Yelp 2018-2019, as part of my academic training. I did not receive compensation directly connected to this paper. Yelp provided data for this project. Our right to publish did not depend on results.