Does Online Search Crowd Out Traditional Search and Improve Matching Efficiency? Evidence from Craigslist | Zendy

Kory Kroft | Zendy; Devin G. Pope | Zendy

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Does Online Search Crowd Out Traditional Search and Improve Matching Efficiency? Evidence from Craigslist

Author(s) -

Kory Kroft,

Devin G. Pope

Publication year - 2014

Publication title -

journal of labor economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 8.184

H-Index - 109

eISSN - 1537-5307

pISSN - 0734-306X

DOI - 10.1086/673374

Subject(s) - search cost , newspaper , matching (statistics) , renting , unemployment , business , apartment , work (physics) , advertising , labour economics , marketing , economics , microeconomics , economic growth , political science , mechanical engineering , statistics , mathematics , engineering , law

Since the seminal work of Stigler in 1962, economists have recognized that information is costly to acquire and leads to “search frictions.” Growth in online search has lowered the cost of information acquisition. We analyze the expansion of the website Craigslist, which allows users to post job and housing ads. Exploiting the sharp geographic and temporal variation in the availability of online search induced by Craigslist, we produce three key findings: Craigslist significantly lowered classified job advertisements in newspapers, caused a significant reduction in the apartment and house rental vacancy rate, and had no effect on the unemployment rate.

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