New Study Shows An Increase In Business Occurs By Labeling Businesses As ‘Black-Owned’

Is there any harm in labeling something as “Black-owned?”

The answer is no. According to the Boston Globe, a study from Harvard Business School wanted to know if the inclusive lanes tech companies were getting into actually worked. Co-author Michael Luca found the answer to be yes.

Focusing on Yelp, who introduced the “Black-owned” business label in 2020, the study showed the feature created a 30% increase in sales, showing the demand in consumer support for those businesses. Particularly in the restaurant space, in-person visits per week jumped 10%, showing the impact past the virtual world. The associate professor’s findings were positive based on his initial thoughts.

According to the Boston Globe, Luca felt putting the spotlight on black-owned businesses would have negative consequences. “If you look at the history of social science research, in most cases, when you raise awareness of the race of a Black person in America, it leads to anti-Black discrimination,” Luca said. This is something he has found out firsthand. Luca previously conducted a similar study on the short-term rental giant, AirBnB.

In the case, titled, “Racial Discrimination on AirBnB,” the Harvard Business Review reported Black hosts received less in rent than hosts of other races, showing signs of discrimination against guests. Even guests with names who “sounded” African American sounding names, faced scrutiny. The company was under fire for years for prominently displaying the names and pictures of its hosts. Since then, AirBnB has limited the amount of host information shared during booking.

The difference between Yelp and AirBnB, in Luca’s opinion, is Yelp did it in a more “targeted and thoughtful way.” His research found most consumers from the Black-owned label were white. “Yelp is not putting pictures and names of the restaurant owners on top of every listing,” the researcher told the Globe. “Instead, they’re allowing people who want to find a Black-owned business to more easily search for it.”