- 23 Sep 2017
- Working Paper Summaries
Nowcasting the Local Economy: Using Yelp Data to Measure Economic Activity at Scale
Data from online platforms ranging from Yelp to Zillow offer the potential for improved measurement of the local economy. This paper finds that Yelp data can predict business growth, as measured by the Census Bureau, before official statistics are released. Predictive power increases with population density, income, and education level.
- 28 Jun 2017
- Research & Ideas
Minimum Wage Hikes Drive (Lousy) Restaurants Out of Business
Do minimum wage increases harm businesses? Evidence from Yelp-inspired research by Michael and Dara Lee Luca suggests the popularity of the business has a lot to do with it. Open for comment; 0 Comments.
- 15 May 2017
- Sharpening Your Skills
The Promises and Limitations of Big Data
Recent stories chart the rise of big data, its impact on business, and how it affects our lives every day. Open for comment; 0 Comments.
- 05 May 2017
- Working Paper Summaries
Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit
This study examines the impact of minimum wage increases on restaurant closures in the San Francisco Bay Area, using data from 2008 through 2016 from the review platform Yelp. The study demonstrates that higher minimum wages increase closure rates among lower-rated restaurants, while higher-rated restaurants are largely insulated from changes.
- 13 Feb 2017
- Research & Ideas
Paid Search Ads Pay Off for Lesser-Known Restaurants
Researchers Michael Luca and Weijia Dai wanted to know if paid search ads pay off for small businesses such as restaurants. The answer: Yes, but not for long. Open for comment; 0 Comments.
- 20 Sep 2016
- First Look
September 20, 2016
Redeveloping a 15th century palace ... Building trust in online marketplaces ... Improving Jewish leadership.
- 10 Aug 2016
- Research & Ideas
Prospective Students Steer Clear of Schools Rocked by Scandal
Who says there is no such thing as bad publicity? When a college experiences a scandal, applications drop. Michael Luca explains what colleges and other businesses should learn when bad news dips the demand curve. Open for comment; 0 Comments.
- 05 Jul 2016
- Working Paper Summaries
The Impact of Campus Scandals on College Applications
This paper explores the prevalence and impact of negative incidents at top United States colleges covered in the media, looking at data from 2001 through 2013. During this period, the authors identified 124 widely covered scandals. Scandals lead to large reductions in applications; a scandal covered in a long-form article has roughly the same impact on applications as a 10-ranking drop in the influential US News and World Report College Rankings.
- 05 Jul 2016
- First Look
July 5, 2016
Using behavioral insights to promote corporate conservation measures ... Do campus scandals hurt admissions? ... Creating shared value at Nestlé.
- 12 May 2016
- Research & Ideas
When Mass Shootings Lead to Looser Gun Restrictions
Do mass shootings lead to more gun-related legislation? The answer is yes, with an important twist, according to new research by Michael Luca, Deepak Malhotra, and Christopher Poliquin. Open for comment; 0 Comments.
- 08 Feb 2016
- Research & Ideas
The Civic Benefits of Google Street View and Yelp
Cities are increasingly rich in citizen-created data, which can be used to improve programs and services, says Michael Luca and his research colleagues. Open for comment; 0 Comments.
- 25 Jan 2016
- Working Paper Summaries
Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment
Online platforms such as Airbnb create new markets by eliminating search frictions, building trust, and facilitating transactions. With the rise of the sharing economy, however, comes the prospect of racial discrimination that is unheard of in established platforms. The authors suggest changes to Airbnb’s site design to reduce or prevent discrimination.
- 14 Dec 2015
- Research & Ideas
Airbnb Hosts Discriminate Against African-American Guests
Experimental research by Ben Edelman, Michael Luca, and Daniel Svirsky revealed widespread discrimination against African-American guests on Airbnb. Now the researchers have created an online tool to mitigate it. Open for comment; 0 Comments.
- 09 Dec 2015
- Working Paper Summaries
Big Data and Big Cities: The Promises and Limitations of Improved Measures of Urban Life
Michael Luca, Scott Duke Kominers and colleagues describe a number of new urban data sources and illustrate how they can be used to improve the study and function of cities.
- 01 Jun 2015
- Research & Ideas
The Surprising Benefits of Oversharing
In a social media culture that encourages sharing of embarrassing information, revealing too much can benefit individuals but hurt businesses. New research papers from Leslie John and Michael Luca help explain why. Open for comment; 0 Comments.
- 22 Apr 2015
- Working Paper Summaries
Is No News (Perceived as) Bad News? An Experimental Investigation of Information Disclosure
Truth-in-advertising laws stipulate that companies cannot provide misleading or incorrect information to customers. Even so, businesses typically decide how much or what kind of information to disclose to buyers. When a business chooses not to disclose information, customers must then infer whether no news is good news or bad news. Through a series of experiments, this paper shows that consumers systematically underestimate the extent to which no news is bad news, and sellers take advantage of this by strategically withholding unfavorable information. Closed for comment; 0 Comments.
- 11 Mar 2015
- Working Paper Summaries
Curbing Adult Student Attrition: Evidence from a Field Experiment
This paper by Michael Luca and colleagues demonstrates how insights from behavioral economics can improve attendance habits among adults in literacy and numeracy programs. In a field experiment consisting of 1,179 adult learners in England, the authors sent behaviorally-informed text messages and organizational reminders to students. The messages led to large increases in attendance rates, and the effects persisted over the three weeks of the campaign. This simple intervention provides a low cost approach for organizations looking to improve attendance and engagement. Closed for comment; 0 Comments.
- 24 Feb 2014
- Research & Ideas
Uncovering Racial Discrimination in the ‘Sharing Economy’
New research by Benjamin G. Edelman and Michael Luca shows how online marketplaces like Airbnb inadvertently fuel racial discrimination. Closed for comment; 0 Comments.
- 28 Jan 2014
- Working Paper Summaries
Digital Discrimination: The Case of Airbnb.com
To build trust and facilitate transactions, online marketplaces present information not only about products, but also about the people offering the products. Many platforms now allow sellers to present personal profiles, post pictures of themselves, and even link to their Facebook accounts. While these features serve the laudable goals of building trust and accountability, they can also bring unintended consequences: Personal profiles may facilitate discrimination. Benjamin G. Edelman and Michael Luca investigate the extent of racial discrimination against hosts on the popular online rental marketplace Airbnb.com. They construct a data set combining pictures of all New York City landlords on Airbnb with their rental prices and information about characteristics and quality of their properties. The authors use this data to measure differences in outcomes according to host race. Nonblack hosts are able to charge approximately 12 percent more than black hosts, holding location, rental characteristics, and quality constant. Moreover, black hosts receive a larger price penalty for having a poor location relative to nonblack hosts. These differences highlight the risk of discrimination in online marketplaces, suggesting an important unintended consequence of a seemingly-routine mechanism for building trust. Key concepts include: Online marketplaces have the potential to reduce discrimination by facilitating more arms-length transactions. However, social platforms such as Airbnb.com, a popular online marketplace for short-term rentals, may have the opposite effect. This paper investigates the differences in prices of properties from hosts of varying races. Non-black hosts charge approximately 12% more than black hosts for comparable properties. Online marketplaces should think carefully about whether, and why, the looks of buyers and sellers should be relevant to the purchase at hand. Airbnb might consider eliminating or reducing the prominence of host photos. It is not clear what beneficial information these photos provide, while they risk facilitating discrimination by guests. Closed for comment; 0 Comments.
Handgun Waiting Periods Prevent Hundreds of Homicides Each Year
Waiting-period laws reduce gun-related homicides by 17 percent and gun-related suicides by up to 11 percent, according to a study by Deepak Malhotra, Michael Luca, and Christopher Poliquin. Open for comment; 0 Comments.