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The Economic Penalty of Terrorism: Increase in Discrimination Against Arabs and Muslims after Paris Attacks

Sander Wagner (sander.wagner@ensae.fr) and Ivaylo Petev
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Sander Wagner: CREST, ENSAE, Institut Polytechnique de Paris

No 2019-22, Working Papers from Center for Research in Economics and Statistics

Abstract: Economic transactions on online peer-to-peer platforms depend on buyers and sellers revealing personal information to facilitate exchanges with the unintended consequence that the information may become a source for discrimination. Using original panel data we show evidence of substantial discrimination against Arab/Muslim hosts in Airbnb’s online rental market in Paris, France. Analysis of 41-months of online transaction data shows a substantial increase in discrimination following large-scale, deadly terrorist attacks in November 2015. Discrimination results in a foregone monthly revenue of at least 106 US dollars for Arab/Muslim hosts in the year before the November 2015 attacks, after which losses increase to at least 178 US dollars. Our results demonstrate the association of mass terrorism with a contraction of a large-scale market of the sharing economy, the cost of which falls disproportionately upon members of an ethnic and religious minority.

Pages: 40 pages
Date: 2019-11-06
New Economics Papers: this item is included in nep-ure
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