Racial Differences in Homeownership: The Effect of Residential Location

Posted: 22 Nov 2002

See all articles by Yongheng Deng

Yongheng Deng

Wisconsin School of Business, University of Wisconsin-Madison

Stephen L. Ross

University of Connecticut - Department of Economics

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ; University of Pennsylvania - Finance Department

Abstract

The rate of homeownership among African-American households is considerably lower than white households in American urban areas. This paper examines whether racial differences in residential location outcomes are among the factors that contribute to the large racial differences in homeownership rates in major US metropolitan areas. Based on the 1985 metropolitan sample of the American Housing Survey for Philadelphia, the paper does not find any evidence that existing racial differences in residential location in Philadelphia decrease the homeownership rate among African Americans. Rather, the empirical evidence suggests that African-American residential location outcomes are associated with lower than expected racial differences in homeownership. Therefore, after controlling for neighborhood, racial differences in homeownership are larger than originally believed, and the ability of racial differences in endowments to explain homeownership differences is more limited.

Keywords: Homeownership, Residential Location, Race, Credit Constraints, Equity Risk

JEL Classification: R21, J15, D12

Suggested Citation

Deng, Yongheng and Ross, Stephen L. and Wachter, Susan M., Racial Differences in Homeownership: The Effect of Residential Location. Regional Science and Urban Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=338640

Yongheng Deng

Wisconsin School of Business, University of Wisconsin-Madison ( email )

4110 Grainger Hall
975 University Avenue
Madison, WI 53706
United States
+1 (608) 262-4865 (Phone)

HOME PAGE: http://https://bus.wisc.edu/faculty/yongheng-deng

Stephen L. Ross (Contact Author)

University of Connecticut - Department of Economics ( email )

365 Fairfield Way, U-1063
Storrs, CT 06269-1063
United States
860-486-3533 (Phone)
860-486-4463 (Fax)

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104-6330
United States
215-898-6355 (Phone)

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

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