A Household-Level Decomposition of the White-Black Homeownership Gap
National University of Singapore (NUS) - Department of Economics
Kien T. Le
University of Virginia
Kiat Ying Seah
National University of Singapore (NUS)
May 25, 2011
Regional Science and Urban Economics, Vol. 42, No. 1-2, 2012
This paper uses a semiparametric homeownership model to estimate and to decompose the household-level white-black homeownership gap into an endowment component and a residual component across the distribution of homeownership rates. We find that the racial gap differs across homeownership rates and that studies that examine the gap only at the mean may be misleading. We also find that although household characteristics explain the homeownership gap for most households, there is a substantial portion of the gap that remains unexplained for households with a very low propensity to own homes. A comparison of the estimates from the semiparametric model and a probit model suggests that the semiparametric approach is able to capture the heterogeneity structure between the ethnic groups, particularly in the tails of the distribution. To illustrate the flexibility of our household-level approach, we decompose the homeownership gap in cities of varying levels of segregation.
Number of Pages in PDF File: 31
Keywords: Homeownership, Race, Segregation
JEL Classification: C14, R20, R21, R23, J1Accepted Paper Series
Date posted: December 1, 2010 ; Last revised: March 1, 2012
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