The Evolution of Discrimination in Online Markets: How the Rise in Anti-Asian Bias Affected Airbnb During the Pandemic

How does discrimination evolve in marketplaces? To explore, we look at the evolution of anti-Asian bias on Airbnb during the COVID-19 pandemic, a period during which there was heightened anti-Asian bias. Using a DiD approach, we find that hosts with distinctively Asian names experienced a 20% decline in guests relative to hosts with distinctively White names, resulting in a loss of revenue in the range of US$180 to US$330 per month for these hosts. We rule out host-guest homophily as the main driver, as the share of Asian guests matched with Asian hosts remained stable during 2020. Additionally, the absence of spikes in discrimination against Black and Hispanic hosts compared with prepandemic levels suggests that our results specifically capture increased anti-Asian discrimination during the pandemic. Our findings highlight the ways in which evolving bias in society manifests in market transactions and the importance of platform design choices.