Everyone knows there are huge racial disparities when it comes to earnings. As of 2014, median household income for whites was almost double blacks'.
The causes for these disparities are often described as complex, but a new experiment shows they may actually be the sad, disturbingly simple result of racial bias.
As described in the RAND Journal of Economics, a group of researchers from Yale and Harvard went to eBay and put up offerings of baseball cards being shown by dark-skinned/African-American hands. They then showed the same cards being held by a light-skinned/Caucasian hand. Cards held by African-American sellers sold for approximately 20% ($0.90) less than cards held by Caucasian sellers, they found.
"A simple auction market (eBay) appears to produce disproportionately negative outcomes for African-Americans even when there is no opportunity to observe demeanor, socioeconomic status, or other non-race but potentially race-correlated features of potential transaction partners," they write.
They note these findings jibe with past experiments done on purchasing automobiles; car price disparities for African-American versus Caucasian buyers were reduced when negotiations were initially conducted online.
"Our results…provide a relatively clean demonstration of the role race may play in economic and other outcomes, including in contexts in which—unlike online—race cannot simply be hidden from view."
Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.