Abstract

http://ssrn.com/abstract=1716987
 


 



Racial Segregation and Discrimination: Evidence from the Rental Housing Market


Paul E. Carrillo


George Washington University - Department of Economics

Dirk W. Early


Southwestern University - Department of Economics and Business

Edgar O. Olsen


University of Virginia - Department of Economics

November 29, 2010

46th Annual AREUEA Conference Paper

Abstract:     
Rental housing discrimination can take many forms. The most visible potential result of discrimination is the segregation of neighborhoods by race and ethnicity. The more subtle form of discrimination examined in this study is to charge different prices to different groups. This form of discrimination is possible if, among other things, owners of housing units believe unobserved factors important to the return on their investment are correlated with race or ethnicity, or if landlords have a taste for discrimination as described by Becker (1957). Regardless of the reason why landlords desire to charge different prices to different groups, theory suggests that these differences will be more pronounced in tighter housing markets, where the cost of discrimination to the landlord is lower. The study proposed here is an extension of the use of hedonic methods to detect discrimination using a much richer set of data than what has been available to previous authors (Follain and Malpezzi (1981), Kiel and Zabel (1995), and Myers (2004) for example) to answer three policy relevant questions related to the variations in access to housing across race and ethnicity: 1) Do minorities pay more for equal quality housing to live in majority neighborhoods? 2) Do minorities pay more for equal quality housing to live in areas with less concentrations of poverty? and 3) Does the tightness of the housing market effect the ability of landlords to charge different rents for equal quality housing based on race and ethnicity? The last question appears to have been largely ignored in previous empirical studies of housing discrimination. We make a considerable effort to include a comprehensive set of covariates in the hedonic equation that, due to data constraints, were not considered in previous studies. First, our primary source of data includes over 450,000 observations on rental housing units with more than 70 detailed questions about the units type, condition, and neighborhood attributes. Second, these data can be linked with data from the 2000 Decennial Census providing additional detailed characteristics about the neighborhood. Finally, information about credit history (at the census tract level) has been provided by Equifax, one of the three national credit reporting agencies. Although it is aggregated at the census tract level, the credit data is notably rich.

JEL Classification: J1

working papers series


Not Available For Download

Date posted: November 29, 2010  

Suggested Citation

Carrillo, Paul E. and Early, Dirk W. and Olsen, Edgar O., Racial Segregation and Discrimination: Evidence from the Rental Housing Market (November 29, 2010). 46th Annual AREUEA Conference Paper. Available at SSRN: http://ssrn.com/abstract=1716987

Contact Information

Paul E. Carrillo (Contact Author)
George Washington University - Department of Economics ( email )
Monroe Hall Suite 340
2115 G Street NW
Washington, DC 20052
United States
Dirk W. Early
Southwestern University - Department of Economics and Business ( email )
1001 East University Avenue
Georgetown, TX 78626
United States
513-863-1592 (Phone)
HOME PAGE: http://www.southwestern.edu/~earlyd
Edgar O. Olsen
University of Virginia - Department of Economics ( email )
P.O. Box 400182
Charlottesville, VA 22904-4182
United States
434-924-3443 (Phone)
434-924-2904 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 198

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.422 seconds