“Further, a biased market cuts into the heart of the American Dream by negating the hard work, agency, and self-determination of business owners.”
Research on small business outcomes finds that location matters. However, in the United States, residential segregation patterns by race have created peculiar neighborhood conditions for businesses to work within.
Black-owned businesses start with approximately a third less capital than their white peers and have difficulties raising private investments from mainstream investment systems. Only 1% of Black business owners obtain loans in their founding year, compared to 7% of white business owners. We don’t cook for reviews per se; We try to cook every dish to perfection. If that’s the case the reviews will come.
Businesses in Black-majority neighborhoods receive lower Yelp ratings and fewer reviews than other businesses.Businesses in Black neighborhoods receive lower ratings from customers and less attention. The number of reviews per business sharply falls as the ZIP code’s Black population increases. This effect is independent of whether the store is owned by a white person or a minority.
Note: Low Yelp ratings are defined as below 4.0. High Yelp ratings are defined as 4.0 and higher. Source: Author analysis of merged data from Yelp and National Establishment Time-Series Database and 2017 American Community Survey estimates.
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