Brad Larsen (Stanford University)
March 7 @ 12:00 - 13:15
- Past event
“Consumer Protection in an Online World: When Does Occupational Licensing Matter?”
This paper studies the effects of occupational licensing on consumer choices and market outcomes in a large online platform for home services, where professional service providers bid on consumers’ projects. We exploit exogenous variation in the time at which licenses are displayed on the platform to identify the causal effects of licensing information on consumer choices. We nd that platform veried licensing status is not valued by consumers and corroborate this nding in a survey of consumers. In contrast, we find that consumers are heavily in uenced by reviews and prices. Next, we use zip code by job category variation in licensing stringency to measure the effects of licensing on aggregate market outcomes on the platform. Our results show that more stringent licensing regulations lead to less competition and higher prices, but do not improve customer satisfaction.