Detecting discrimination against ethnic minorities can promote social inclusion in multicultural social environments such as the city of Barcelona. In 2020, 21.6% of its population was foreign. This population consisted of 179 nationalities, of which the most numerous were Italian, Pakistani and Chinese.  Stereotypes and prejudices against minorities may lead to discrimination and have clear negative consequences for minorities. They deserve close attention from policy makers but are seldom studied due to the intrinsic difficulties in measuring them. 

This study investigates private individuals’ behaviour in Spain’s main second-hand markets operating on online platforms. These platforms have brought about a veritable revolution in second-hand markets, with a substantial increase in the volume of private transactions between strangers. Our research design allows us to identify discrimination against ethnic minorities and to explore the possible reasons for it. 

The use of field experiments to identify ethnic discrimination dates back to the mid-1960s in the US, and has recently spread to European countries (Riach & Rich, 2002). These studies have covered different aspects of immigrants’ life such as discrimination in job hiring and the housing market, but are less frequent in the field of online second-hand markets. Yet, they have been very effective in detecting discrimination against minorities. For instance, Ayres and Siegelman (1995) found that dealers quoted significantly lower prices to fictitious white male buyers than to black female buyers. List (2004) found that fictitious minority sellers received lower offers for American sports cards than those belonging to majorities. He interpreted this discrimination to be “statistical” or based on stereotypes about minority sellers’ characteristics, which could be overcome with a higher reputation. 

Doleac and Stein (2013) analysed market outcomes by selling iPods through local online classified advertisements throughout the US. They found that black sellers received fewer and lower offers than white sellers. They interpreted this finding as indicating lower levels of trust for black sellers possibly based on statistical discrimination. In Sweden, Ahmed et al (2009) detected discrimination against fictitious prospective buyers with a typical Arab/Muslim name in small business transfers on the internet. Finally, in Spain, Bosch and Cobacho (2012) compared the response rates to purchase offers made by fake buyers with Spanish, British, North African and Latin-American names to real sellers in a second-hand market. The study found that all buyers with non-Spanish names obtained lower rates of response than buyers with Spanish names.

All these studies suggest that ethnic discrimination may be prevalent in the marketplace, but also that it may have various sources. As Becker (1975) argued, individuals in the majority may have a general “distaste” for minorities based on prejudices. Prejudices are irrationally negative emotions about other groups, and are difficult to change. However, members of the majority may also discriminate on a “statistical” basis (Arrow 1972; Phelps 1972), i.e., according to stereotypes or rational assessments about the typical behaviour of the minorities with whom they interact, based on their own experiences or those of other people who they trust. Stereotypes can change as new or better information is received contesting previous assessments or as the context in which the stereotype applies changes.

Our study provides a framework for distinguishing the two forms of discrimination by comparing how minorities are treated when acting as either buyers or sellers in online second-hand markets. If discrimination has a prejudicial basis, we would expect it to apply equally to minorities regardless of the role they play in the market. If, on the contrary, we observe that discrimination against minorities varies when they buy compared to when they sell products, we could interpret this difference as suggesting the presence of statistical discrimination based on stereotypes about minorities’ alternative behaviour in different contexts.

We used an experimental approach to test if there is discrimination against ethnic minorities in Spain’s main online second-hand market. The field experiment was conducted in the city of Barcelona between February and October 2020. Originally planned to last for eight weeks, the experiment was interrupted from March 15 to August 15 due to the special measures of confinement and social distancing imposed by the government because of the covid-19 pandemic. The experiment consisted of buying or selling products under fictitious names clearly indicating the ethnic background of the buyer or seller: Catalan/Spanish, Latin-American, Arab or Chinese. We exaggerated the difference between Spanish and Latin-American buyers and sellers by selecting composite names for the latter rarely used by native born Spaniards, as listed by INE’s lists of most popular names. 

In total, we conducted 583 replications of the experiment in which four fictitious buyers with various ethnic backgrounds made bids for as many products sold by real buyers, and 508 replications in which four fictitious sellers sold four similar products to real buyers. We classified the products bought and sold into three categories, depending on their typical market prices (low: from 15 to 49 euros; medium: from 50 to 149 euros; and high: from 150 to 550 euros), and carried out a similar number of experiments in each. The specific names and genders of the fictitious sellers and buyers were randomly assigned, as was the order in which the bids were made or the products were uploaded, all done within a short time span. We then recorded all positive responses to our purchase bids from real sellers, or any bids for our products made by real buyers, and compared if their numbers differed by the ethnic background of the fictitious buyer or seller. 

The purchase and sale transactions were never completed. In order to have as little effect as possible on the second-hand market users, transactions were ended as quickly as possible by withdrawing the products for sale or the purchase offers after a few days. Deception is a serious issue which in our case required the approval of an independent Ethical Board before the fieldwork could start. The Board decided that detecting and understanding how discrimination operates outweighed these ethical concerns.

The overall results point to the existence of discrimination against minorities on the supply side, not on the demand side. Ethnic minorities were discriminated against by sellers when trying to purchase second-hand products. In contrast, they were treated as fairly as natives by prospective buyers when selling second-hand merchandise.

We can only speculate on the reasons for this difference. One possibility is that we inadvertently introduced experimental effects when selling products. While we tried to make these products as equivalent as possible in their technical specifications or in the words and pictures used to advertise them, we may have unintentionally added subtle differences favouring some groups. An alternative explanation is that the difference reflects a real adjustment in the behaviour shown towards ethnic minorities when they act either as buyers or sellers. Perhaps the reason for discriminating against minorities is a distrust based on stereotypes about buyers’ probability of materializing a deal without further bargaining at the time of making the exchange, not about the quality of sellers’ goods.

Or perhaps the buyer expects to bargain a better price with a minority seller at the time of the exchange and this offsets any distrust he or she may have about the quality of the goods. In both cases, the evidence would point to the presence of statistical discrimination based on stereotypes about minority’s alternative trustworthiness as buyers and sellers, not to prejudices based on an emotionally stable rejection of the minority.

The results show that there are differences in the level of discrimination against purchasing minorities depending on their ethnic background. Only minority buyers with Arab and Chinese names were discriminated against, while buyers with Latin-American names were not. The results suggest that only culturally distant minorities are discriminated against, not minorities with a culture close to that of the natives. 

We report the main results from a field experiment carried out in Barcelona between February and November 2020 aimed at assessing how much buyers and sellers operating in Spain’s main online second-hand market discriminate against minorities with different ethnic backgrounds. The first part of the experiment consisted in sending purchase offers to real sellers from four fictitious buyers with names clearly indicating a Spanish/Catalan, Arab, Chinese, or Latin-American background. The second part consisted in putting up for sale four equivalent products for a week under fictitious identities evocative of the four ethnic backgrounds. 

The results show that sellers do indeed discriminate, but only against minorities with Arab and Chinese – not Latin-American – backgrounds, and only when buying at the listed price. In contrast, we found no evidence of discrimination against minority sellers. One possible explanation for this difference is that minorities are discriminated against on statistical grounds, e.g., based on beliefs about their likelihood to complete a purchase as agreed online – a mistrust that would not apply when selling goods – rather than on a distaste for minorities. 

We have uncovered evidence of discrimination against minorities in market exchanges between private individuals, but only against minorities perceived to be culturally distant. This complicates minorities’ integration into the host society, encouraging segregation and the social problems associated with it. More efforts should be made towards fostering a fruitful dialogue among ethnic groups in the same society that respects their particular identities without imposing penalties for their differences.

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