SELLER-BUYER ETHNIC MATCHES: THE CASE OF CAR TRANSACTIONS AT TWO NORTH AMERICAN AUTO DEALERSHIPS

Abstract

Using personnel and transaction data obtained from two Canadian auto dealerships, we examine whether ethnic matches between salespersons and customers affectsales prices and the number of units sold by individual salespersons. Regarding prices, we detect neither premium price setting nor discounting among seller-buyer matches of the same ethnic groups relative to those of different ethnic groups. Regarding the number of units sold by individual salespersons, however, we find that, relative to customer demographics, salespersons sell larger quantities to customers of the same ethnic group. Moreover, we find that high-performing salespersons conduct more transactions with customers of the same ethnic group than low-performers, especially in months when business conditions are unfavorable.