Bloomberg via Getty Images

Renters with African American-sounding names turned down

Kara Brandeisky / Money
December 11, 2015

This story originally appeared on Money.

African American travelers may have a harder time securing an Airbnb rental than white ones, according to a new study from Harvard Business School.

In an experiment, the researchers found that Airbnb hosts were 16% less likely to accept fictional guests with African American-sounding names than guests with white-sounding names — even though the guests had otherwise identical profiles.

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On Airbnb, ordinary people can rent out their own housing as lodging. Airbnb users see the service as a win-win: Hosts make some money by renting out extra space, and guests can stay in accommodations with more character and lower costs than a hotel. However, the vast growth of Airbnb has raised some legal questions, as rentals may violate city housing codes and guests might not have the same safety protections as they would at hotels.

The Harvard Business School study raises another question: Are guests more vulnerable to discrimination when individual hosts have the power to accept and reject applicants based on their profiles? "Clearly, the manager of a Holiday Inn cannot examine names of potential guests and reject them based on race," the researchers write. "Yet, this is commonplace on Airbnb, which now accounts for a growing share of the hotel market."

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To conduct the study, the researchers contacted Airbnb hosts in Baltimore, Dallas, Los Angeles, St. Louis, and Washington, D.C. last summer. They created identical male and female profiles, and then assigned the profiles stereotypically white and black names. They found that the hosts approved the guests with white-sounding names 50% of the time, but only approved the guests with African American-sounding names 42% of the time — an eight percentage point and 16% difference.

This pattern held across almost all demographics. White or black, young or old, for entire units or shared properties, every kind of host was more likely to reject travelers with black-sounding names. Hosts discriminated against both male and female African Americans. The only factor that made a slight differences? Hosts who had reviews from other African American guests were more likely to accept new black visitors than other hosts, but were still more likely to accept white guests overall.

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Hosts discriminated even though they faced a real financial hit for doing so. The researchers checked whether the host ultimately filled the spot after rejecting the fictional black guest. Hosts only did so 35% of the time. The researchers calculated that hosts lost about $65 to $100 each time they rejected black guests.

Under the Civil Rights Act of 1964, it's illegal for hosts who rent out more than five rooms to discriminate against guests based on their race. But the researchers say it's unlikely Airbnb itself could be held liable.

"Airbnb is one of the most open, trusted, diverse, transparent communities in the world," Airbnb told Bloomberg. "We respond quickly to any concerns raised by hosts or guests, and we have a zero-tolerance policy for discrimination on our platform."

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