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Price Discrimination in a Racially Stable Housing Market

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  • H J Sumka

    (Office of Policy Development and Research, US Department of Housing and Urban Development, Washington, DC 20410, USA)

Abstract

Equilibrium models posit that, since whites have a taste for discrimination, they will outbid blacks for housing in racially homogeneous neighborhoods. Contrary observations that blacks pay more are often attributed to the price pressures that result from rapid expansion of the black population. This paper uses hedonic value assessment techniques to estimate racially based price differentials in a market where the black population has been stable for a long period. Explicit tests are made for boundary effects and market segmentation. The results indicate that blacks pay a discriminatory premium for housing, that results from collusive-like behavior that limits their housing opportunities.

Suggested Citation

  • H J Sumka, 1977. "Price Discrimination in a Racially Stable Housing Market," Environment and Planning A, , vol. 9(8), pages 905-915, August.
    • Handle: RePEc:sae:envira:v:9:y:1977:i:8:p:905-915
    DOI: 10.1068/a090905
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    References listed on IDEAS

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    1. Martin J. Bailey, 1966. "Effects of Race and of Other Demographic Factors on the Values of Single-Family Homes," Land Economics, University of Wisconsin Press, vol. 42(2), pages 215-220.
    2. Howard J. Sumka, 1977. "Measuring the Quality of Housing: An Econometric Analysis of Tax Appraisal Records," Land Economics, University of Wisconsin Press, vol. 53(3), pages 298-309.
    3. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, September.
    4. Mahlon R. Straszheim, 1975. "An Econometric Analysis of the Urban Housing Market," NBER Books, National Bureau of Economic Research, Inc, number stra75-1, May.
    5. Lapham, Victoria, 1971. "Do Blacks Pay More for Housing?," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1244-1257, Nov.-Dec..
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