Race, computers, and online shopping - Research Notes & News - Brief Article

EconSouth, Spring, 2002

The issue of whether the United States faces a "digital divide" -- whether minorities and other socio-economically disadvantaged groups have less access to computers and the Internet than whites and middle-and upper-income groups do -- has received considerable attention from policymakers. Investigating the extent, causes and consequences of a digital divide is important because of the rising use of computers and the Internet in workplaces, schools and homes. In addition, there is widespread concern that inequalities in access and usage may limit opportunities for employment, education and political participation among certain demographic groups.

In a recent working paper, Hiroshi Ono and Madeline Zavodny examine racial and ethnic differences in computer ownership and Internet usage. They focus on online shopping, the fastest-growing segment of Internet usage in the United States, because few studies have examined racial and ethnic differences in e-commerce behavior. The authors find that African Americans and Hispanics are less likely to own or use a computer than are non-Hispanic whites but are not less likely to shop online. Indeed, African Americans appear to shop online more frequently and to spend more than non-Hispanic whites do.

Ono and Zavodny write that one possible explanation for this finding is that, as shown in previous research, minorities may experience price discrimination in face-to-face retail transactions. Because Internet transactions are race-blind, minorities may shop online more frequently and spend more than whites. Indeed, recent research suggests that minorities and whites who buy a car over the Internet pay similar prices, whereas minorities pay more at dealerships than whites do, on average.

WORKING PAPER 2002-01 JANUARY 2002