Putting Religious Bias in Context: How Offline and Online Context Shape Religious Bias in Online Pro-social Lending

Biases on online platforms pose a threat to social inclusion. We examine the influence of a novel source of bias in online philanthropic lending, namely that associated with religious differences. We first propose religion distance as a probabilistic measure of differences between pairs of individuals residing in different countries. We then incorporate this measure into a gravity model of trade to explain variation in country-to-country lending volumes. We further propose a set of contextual moderators that characterize individuals’ offline (local) and online social contexts, which we argue combine to determine the influence of religion distance on lending activity. We empirically estimate our gravity model using data from Kiva.org, reflecting all lending actions that took place between 2006 and 2017. We demonstrate the negative and significant effect of religion distance on lending activity, over and above other established factors in the literature. Further, we demonstrate the moderating role of lenders’ offline social context (diversity, social hostilities, and governmental favoritism of religion) on the aforementioned relationship to online lending behavior. Finally, we offer empirical evidence of the parallel role of online contextual factors, namely those related to community features offered by the Kiva platform (lending teams), which appear to amplify the role of religious bias. In particular, we show that religious team membership is a double-edged sword that has both favorable and unfavorable consequences, increasing lending in general but skewing said lending toward religiously similar borrowers. Our findings speak to the important frictions associated with religious differences in individual philanthropy; they point to the role of governmental policy vis-à-vis religious tolerance as a determinant of citizens’ global philanthropic behavior, and they highlight design implications for online platforms with an eye toward managing religious bias.