Digital Discrimination: The Case of Airbnb

Michael Luca
Digital Discrimination: The Case of Airbnb.com (pdf)

Online marketplaces often contain information not only about products, but also about the people selling the products. In an effort to facilitate trust, many platforms encourage sellers to provide personal profiles and even to post pictures of themselves. However, these features may also facilitate discrimination based on sellers’ race, gender, age, or other aspects of appearance. In this paper, we test for racial discrimination against landlords in the online rental marketplace Airbnb.com. Using a new data set combining pictures of all New York City landlords on Airbnb with their rental prices and information about quality of the rentals, we show that non-black hosts charge approximately 12% more than black hosts for the equivalent rental. These effects are robust when controlling for all information visible in the Airbnb marketplace. These findings highlight the prevalence of discrimination in online marketplaces, suggesting an important unintended consequence of a seemingly-routine mechanism for building trust.

Artists Resale Royalties: on bullshit, part three

Australia’s Artists Resale Royalty (ARR ) scheme has so far cost taxpayers $2.2 million in direct support. And over many years the publicly funded lobbyists for this scheme, headed up by the National Association for the Visual Arts  Ltd, have additionally spent a lot of public money on lobbying for their scheme. ARR is a very political project. It is imposed by law on a lot of small ‘sole trader’ businesses; it imposes quasi-compulsory collective management on artists and also imposes a restraint of trade on an art market where profit margins are generally quite thin. ARR is not an ‘art project’.  

The fact that these publicly funded arts organisations have, for years, been free to use public money, intended for art projects, to conduct a very partisan political campaign really rankles.

The lobbyists for compulsory ARR are involved in a ‘last ditch’ lobbying campaign for their compulsory ARR scheme to “continue”.  As always there is a lot of fudge and misleading by omission to their advocacy. In particular they continue to claim that the majority of royalty payments, to date, have gone to indigenous artists: in this case to date is a very very large lump of fudge.

In the first years of the scheme’s operation, most of the royalty payments raised were on resales of indigenous art. However because resales of indigenous art make up only about 10-15% of total art resales by value, it is inevitable that in time more and more of the royalty payments will come from the resales of non-indigenous art. And it is also inevitable that the distribution of royalty payments by value must, eventually, map to the universal truth that when it comes to the resale of art: artworks by the top 20 artists most favoured by the market get most of the money and the next 80 or so of bestselling artists get most of the remainder.

The agency charged with administering the scheme, the Copyright Agency Limited (CAL), recently released some updated figures and information about the operations of the ARR. I also noted that this detailed information was not made available at the time of the ARR review process. The following analysis is based on the figures provided within that report.

Generally speaking, analysis of the top 21 payments confirms that this scheme is already starting to follow the usual market pattern: a handful of sales of a handful of top 20 artists  constitute most of the total value of art resales and therefore most of the total value of collected Art Resale Royalties.  This is despite the fact that the scheme apparently only currently affects about 10% of resales (according to CAL’s report). Obviously as the scheme starts to affect more and more of the majority of  art resales, the skewing of the distribution to a handful of artists such as Whitely, Nolan, Williams etc will inevitably become more pronounced. It would only take the scheme to collect another 10 to 20 high-end sales in the next year, for it to push the distribution to the handful of artists most favored by the market towards 30% or more.

The breakup of the top 21 resale royalty payments is :

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Operation 2770: TACSI’s Family by Family expands to Mt Druitt

Family by Family about which Troppodillians have heard before is spreading its wings. We’ve started in Mt Druitt where we’ve scoped the program which means investigating how it should be changed to optimise it to the local community. Here’s the Scoping Report which I think makes interesting reading.

Anyway we launched the scoping report with the Minister who’d commissioned us to establish the program – Pru Goward. And here’s my speech at the function. One thing that got my attention was the fact that, according to the scoping report, quite a few people from the area have tattoos of the postcode. And the supporters of Greater Western Sydney take signs of their postcodes to fixtures against Sydney Football Club – which is now more explicitly the team from the leafy suburbs.

Here also is the audio of a recent interview on this by Alex Sloan.

Notes for a Speech by Nicholas Gruen, Chairman of the Australian Centre for Social Innovation at the launch of the Family by Family Scoping Report for Mt Druitt, 12th March, 2014

I

Welcome to our modest function at Postcode 2770

Still, I’m reliably informed that from little things big things grow.

These are the words of Mystic (pronounced Mystique). She’s 21 now but was in out of home care since she was 3.

It happened so quickly. Once I turned 18, they sort of kicked me on my arse. They said ‘here’s $750, see you later, thank you’. And I’m just like ‘what the hell?’. A book and $750. That’s for being in care all your life.

Actually it makes you feel like an outsider. It makes you feel non existent on this earth. Like you are an alien. It does. It affects when you go to school too. You’re so used to being called ‘client’ and stuff that you start looking at yourself different to everyone else.

This example is not from NSW, but it’s not such an extreme example for those who know the system. And this is after what must be a decade, perhaps two of talking about “citizen centric services”!

II

Family by Family is different.

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Bruce Chapman on Government as a risk Manager

Jan Libich recently interviewed Bruce Chapman, who was one of the main architects of the HECS scheme via which university places are financed in Australia, a system that is being copied all around the world now, making Bruce Australia’s most influential international economist by a mile. Bruce talks about this scheme and about the problem of how to manage risk more generally for governments. Follow the link and enjoy!

Shorewalker’s flotsam, April 2014

An experiment in occasional linkage to insights that might outlast the daily news cycle. If you find any of it interesting, let us know in the comments.

  • Prepare for the knowledge automation transition to take decades (ABC Radio National Future Tense) – How long might it take for developed economies to make the transition to knowledge automation in the 21st century? One answer, from Tyler Cowen: About 60 years, the same as it took to transition to muscle automation from 1780. Cowen adds: “In the very long run it will be splendid, but along the way it’s not always going to feel splendid.” The program quotes Erik Brynjolfsson, co-author of The Second Machine Age, noting once again that in the US around the mid-1990s productivity and wealth became decoupled from employment and median income, which stagnated. The concentration of reward in a knowledge economy was neatly predicted by the late Sherwin Rosen in 1981′s The Economics of Superstars, but more and more people are coming to understand it.
  • flakeJust say “no” to flake (Australian Marine Conservation Society) – Never mind the WA shark saga. Misguided as the WA government’s actions may be, they are insignificant next to the issue of commercial shark fishing. Try something else with your chips.
  • Teach your kids to keep trying (Farnam Street blog) – How does a US public school chess program keeps winning national competitions? By teaching grit: “I really believe that’s why we seem to win girls’ nationals sections pretty easily every year: most people won’t tell teenage girls (especially the together, articulate ones) that they are lazy and the quality of their work is unacceptable. And sometimes kids need to hear that, or they have no reason to step up.”
  • Ask yourself whether you want happiness or meaning (Roy F Baumeister) – Psychology professor Roy Baumeister on creating a meaningful life: “Time spent imagining the future was linked especially strongly to higher meaningfulness and lower happiness … If you want to maximise your happiness, it looks like good advice to focus on the present, especially if your needs are being satisfied. Meaning, on the other hand, seems to come from assembling past, present and future into some kind of coherent story.” Baumeister suggests four “needs for meaning”: purposes that guide your actions, justifications for your actions, actually making a difference (efficacy) and feeling you’re a good person. What is the meaning of life? There are thousands of different ones, but they respond to these four needs. A shrewd commenter asks: is it tautological to say that the meaning of life is to find meaning, without deciding what the good meanings are?
  • Opternative wants to bring the eye exam online (Digital Trends) – The range of services challenged by online services grows by the day. The US-based Opernative startup offers online and app based eye tests on your desktop and tablet computer. They are targeting a cost of $20 for an exam. (Optometry offers an interesting pointer to how the market can deliver lower-cost health solutions, since it does not have the same regulation as other medical fields.)
  • Australia is a global payments system leader  (Public Accountant) –Beverley Head on an unexpected success, driven in part by the RBA’s desire for more payments innovation. We lead the world in contactless payments, and new payments mechanisms are proliferating here. “The RBA’s 2012 strategic review of innovation in the payments system made a series of recommendations … [It] spurred the creation of a collaborative payments hub, allowing near real-time settlement. There are also now plans to establish a central addressing hub that could let people transfer funds knowing only the payee’s mobile phone number … The major banks are racing to mobile payments.”
  • Productivity has had its best two years since 2001-02 (AAP) – Remember how the Gillard Government was a disaster for labour productivity? No, it wasn’t. Labour productivity has just recorded its fastest two years of growth since 2001-2002. It’s a productivity boom! So a triumph for Labour then? No, not really that, either. The real answer to the puzzle is the one Bob Gregory put forward some time ago. The worst labour productivity performances are in mining and utilities, and that’s mostly because of all the investment they’re doing which hasn’t yet paid off. Business-people mostly keep going on about labour productivity as a problem because they want to convince us of the need for further labour market deregulation. But as the Grattan Institute’s John Daley has pointed out, there’s no evidence this will provide much of a transformation.
  • Don’t start environmental measures by assuming stupidity (Eric Crampton) – Why carbon pricing works better than fuel standards: “Imagine that you set a fuel economy standard instead of a carbon/petrol tax in a world where customers are forward-looking and not idiots. Well, once they’ve bought the more efficient car, the value they derive from burning another litre of petrol increases substantially: they can drive farther, and they’re not charged any more for that litre of petrol. And so a lot of the reductions in carbon emission you might have expected get whittled away by that people drive more. If you’d done it instead with a petrol tax, the marginal cost of another litre of petrol is higher. People still flip to the more efficient vehicle, but petrol usage doesn’t rebound as much as a consequence because the marginal cost of a litre is higher.” Greg Hunt almost certainly knows this, but the same story applies to direct action efficiency measures promised at some industrial facility.
  • carparkProtecting historic buildings costs nothing, right? Wrong (The Urbanist, Alan Davies) – Uses the debate over Melbourne’s Total Car Park to tell some preservation truths. First, not all ageing buildings will end up loved. Second, “historical significance” is not worth endless money. “Most of the claims to historical significance are arcane [and] aren’t compelling either; in fact they verge on the inconsequential when compared to the cost of protection  … Compared to how most history is recorded – in books, on film, on a plaque, or in a museum – protecting buildings is an extraordinarily expensive exercise.” Maybe it’s time for Edward Glaeser’s idea of a a fixed annual “preservation budget”. (I’d pay good money to preserve Dr Davies intact forever, though.)
  • We can graph stories (Kurt Vonnegut on Youtube) – Kurt Vonnegut explores the shape of stories – an idea which started off as his rejected masters thesis – and explains why Cinderella is like The Bible. “Anyone can graph a simple story if he or she will crucify it, so to speak, on the intersecting axes I here depict.”

  • Most Australians don’t see God as essential to morality (Pew Research Center) – In Australia, just 23 per cent of people say you must believe in God in order to be moral. Only five of 40 countries recorded a lower percentage. And there’s a gulf between the attitudes of high-income and low-income nations. Even the US, an outlier amongst rich countries, recorded a lower percentage than any country poorer than Russia. With one exception – China. But in China the concept of “God” has long carried a different cultural package.
  • The Australian military should not take over the war on asylum seekers (John Menadue) – John Menadue gets it right: the Australian military has made a grievous misjudgment in allowing itself to become central to asylum-seeker policy implementation. “For political purposes the government has deliberately embarked on a policy and a language to militarise the asylum seeker issue in the same way the Howard Government did in the ‘war on terror’. It is designed to highlight the government’s resolve, to play to our fears about a threat and to lessen our rights to be informed … But the ‘war on terror’ and the so-called ‘war on asylum seekers’ would in fact be much better conducted by police, customs and our intelligence services … Senator Conroy has been criticised for saying that General Angus Campbell, the head of Operation Sovereign Borders, has participated in a ‘political cover-up’. In my view that is precisely what the government and General Campbell have done.”
  • Read the greatest opening in journalistic history (The Atlantic) – This essay, titled The Dark Power of Fraternities, loses its way quickly and fails to answer, um, fundamental questions. But the first four long paragraphs have a dementedly poetic dissonance between writing style and subject matter that elevate them to greatness. “It takes a certain kind of personal-injury lawyer to look at the facts of this glittering night and wrest from them a plausible plaintiff and defendant, unless it were possible for Travis Hughes to be sued by his own anus.”
  • Rent Much Ado About Nothing – Filming the original screwball rom-com in noirish modernity, Joss Whedon delivers the most watchable Shakespeare adaptation in decades. The cast, stuffed with Whedon regulars, clearly had the time of their lives filming on a tiny budget, in a 12-day gap before their director went back to editing the tedious Avengers movie. There have been versions with better line readings, but rarely a more convincing spirit. Ought-to-be-huge-star Amy Acker’s smart, vulnerable, wonderful Beatrice commands centre stage, like Whedon heroines before (or is that after?) her. BuffyFirefly and Dollhouse fans already know this, but Whedon takes a Shakespearean delight in wordplay and pace-changing, and it pays off hugely here. Watch with your significant other.

Are RDA race hatred law amendments needed?

bolt-still-a-dickhead1Troppo author and frequent commenter John Walker asks:

Ken

The Bolt case was just one case-  is there much information about how 18C has been applied, on a wider scale.

Its pretty hard to judge whether there is a problem needing changes to the law , or not, on the basis of just one case. Do you have any info re other cases and judgements?

Fortunately, the answer is yes.  Section 18C of the Racial Discrimination Act 1975 was introduced by the former Keating Labor government in 1994.  In 2004 Deakin University legal academic Dan Meagher wrote a reasonably comprehensive review of its first decade of operation in an article titled “So Far So Good?: A Critical Evaluation of Racial Vilification Laws in Australia“.  I almost completely agree with his analysis and opinion, and so rather than reinvent the wheel I will simply reproduce edited extracts from his article with some relatively brief comments of my own at the end (although the whole of Meagher’s article is worth reading if you have time).

In essence, Meagher argues (and I agree) that racial vilification laws are needed, but that the current proscription of words which would be “offensive”, insulting” or humiliating” to reasonable members of a targeted race is much too vague, and consequently potentially has an unacceptably chilling effect on democratically essential free speech.  Similar conclusions have been expressed by a range of commentators well before the Bolt case.  This is not just a confected controversy beaten up by Abbotistas and Murdoch minions.

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German Film Festival

Here are the top picks from the German Film Festival in Melbourne, with the full schedule below.

After the partner of a policeman is killed he is drawn into a mysterious plot of conspiracy and terrorists.
☆☆☆☆ IMDB
When two brothers meet in their family’s isolated house on the coast, previously unresolved issues and tensions are revealed. Marten wants to pick up their jailed mother when she is released after killing their abusive father a few years ago, while Volker cannot forgive the way he was treated by his father and only wants to sell the house and forget the past.
☆☆☆☆ IMDB
An elderly couple, married for 62 years, subtly interviewed by their son, reflecting on their marriage leading to surprises how these two got married in the first place.
☆☆☆☆ IMDB
Florian is an overweight teenage boy, adored by his mother and abhorred by his macho father. He loves disco music and dressing up in the appropriate clothing. Yet his life undergoes a transformation when his mother has a stroke. How will he and his father get on?
☆☆☆☆ IMDB
The darker side of human interaction is revealed in this drama about a group of people that seem to be pursued by bad luck. As the individual storyline develop, a decidedly dark humor pervades the film, revealing a warped view of human existence.
☆☆☆☆ IMDB
With her husband leaving, Silvi finally realizes that her rather dull marriage has failed. The 47-year-old woman, now lost and lonely, but also driven by the desire to not be alone, she decides to start over again.
☆☆☆☆ IMDB
The documentary explores the role athletes played in the GDR, particularly during the 1960s and 1970s when East Germany was a major competitor at the Olympic Games. The film focuses on the intensive sports program with which the athletes, who were treated like heroes, were involved.
☆☆☆☆ IMDB
Justus Neumann revisits Karl Kraus’ satire The Last Days of Mankind (1918) in an inspiring lecture about the absurdity of war and the mistakes that mankind seems to be repeating throughout history.
☆☆☆☆ Good Reads

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Think tanks – Influence isn’t always about offering practical solutions

Many people say the best way to influence government is to give policymakers practical solutions to problems they care about. According to this perspective, academics and think tanks scholars can get it wrong by spending too much time analysing problems and their causes. Policymakers don’t care about theory, they just want policies and programs that work.

Applied to think tanks, this pragmatic approach means identifying the most important problems policymakers are dealing with and producing products that explain how best to solve them within the constraints of electoral politics, institutional structure and government budgets. In Australia, the Grattan Institute seems to embody this approach. It promotes itself as a source of "Independent, rigorous and practical solutions to Australia’s most pressing problems."

The trouble with this view is that think tank scholars have sometimes succeeded by doing exactly the opposite. For example, Charles Murray is widely acknowledged as one of the most influential think tank scholars in the United States. His accent to influence began in the early 1980s with Losing Ground, a book that rejected the conventional understanding that poverty was the problem and welfare was the solution. According to Murray, welfare dependency was the problem, entrenched poverty was one of its symptoms and the solution was to abolish government welfare programs.

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