Working Paper: NBER ID: w30932
Authors: Abhay Aneja; Michael Luca; Oren Reshef
Abstract: Is there latent demand to support Black-owned businesses? To explore, we analyze a new feature that made it easier to identify Black-owned restaurants on a large online platform. We find that labeling restaurants as “Black-owned” increased customer engagement and firm performance, as measured by online traffic, calls, orders, and in person visits. These effects are most pronounced in left-leaning areas characterized by lower bias against racial minorities, as measured by regional variation in voting patterns and IAT scores. Restaurants that receive the label also see an increase in the fraction of reviews that are left by White customers.
Keywords: black-owned businesses; consumer demand; racial inequality; Yelp; business performance
JEL Codes: J0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labeling a restaurant as black-owned (J15) | Increase in weekly page views (Y10) |
| Labeling a restaurant as black-owned (J15) | Increase in website views (Y10) |
| Labeling a restaurant as black-owned (J15) | Increase in calls (L96) |
| Labeling a restaurant as black-owned (J15) | Increase in orders (C69) |
| Labeling a restaurant as black-owned (J15) | Increase in revenue from transactions on the Yelp platform (D26) |
| Labeling a restaurant as black-owned (J15) | Enhanced business performance (L25) |
| Lower racial bias neighborhoods (R23) | More pronounced effects of black-owned label (J79) |
| Increased presence of white customers (R23) | Enhanced business performance at black-owned restaurants (L25) |