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Price discrimination in the housing market

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  • Ihlanfeldt, Keith
  • Mayock, Tom

Abstract

There is little credible evidence on whether price discrimination exists in the housing market. Using a large sample of single-family home sales from Florida where both the race of the seller and buyer are known, we present evidence using the traditional and Harding et al. [HRS, Harding, J.P., Rosenthal, S., Sirmans, D.F., 2003. Establishing bargaining power in the market for existing homes. The Review of Economics and Statistics 85, (1) 178-188] approaches to empirical estimation. Omitted variable bias is found to plague the traditional approach. Results from following the HRS approach indicate that price discrimination exists by whites and Hispanics against blacks and Asians. Price discrimination against blacks is restricted to non-majority black neighborhoods and is smaller in magnitude in neighborhoods containing younger and more educated homeowners.

Suggested Citation

  • Ihlanfeldt, Keith & Mayock, Tom, 2009. "Price discrimination in the housing market," Journal of Urban Economics, Elsevier, vol. 66(2), pages 125-140, September.
  • Handle: RePEc:eee:juecon:v:66:y:2009:i:2:p:125-140
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    References listed on IDEAS

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    1. Myers, Caitlin Knowles, 2004. "Discrimination and neighborhood effects: understanding racial differentials in US housing prices," Journal of Urban Economics, Elsevier, vol. 56(2), pages 279-302, September.
    2. John Yinger, 1998. "Evidence on Discrimination in Consumer Markets," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 23-40, Spring.
    3. Chambers, Daniel N., 1992. "The racial housing price differential and racially transitional neighborhoods," Journal of Urban Economics, Elsevier, vol. 32(2), pages 214-232, September.
    4. Clapp, John M & Giaccotto, Carmelo, 1992. "Estimating Price Trends for Residential Property: A Comparison of Repeat Sales and Assessed Value Methods," The Journal of Real Estate Finance and Economics, Springer, vol. 5(4), pages 357-374, December.
    5. Schafer, Robert, 1979. "Racial discrimination in the Boston housing market," Journal of Urban Economics, Elsevier, vol. 6(2), pages 176-196, April.
    6. King, A Thomas & Mieszkowski, Peter, 1973. "Racial Discrimination, Segregation, and the Price of Housing," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 590-606, May-June.
    7. Donald Haurin & Christopher Herbert & Stuart Rosenthal, 2007. "Homeownership Gaps Among Low-Income and Minority Households," Working Papers 07-02, Ohio State University, Department of Economics.
    8. Kiel, Katherine A. & Zabel, Jeffrey E., 1996. "House Price Differentials in U.S. Cities: Household and Neighborhood Racial Effects," Journal of Housing Economics, Elsevier, vol. 5(2), pages 143-165, June.
    9. John Yinger, 1978. "The Black-White Price Differential in Housing: Some Further Evidence," Land Economics, University of Wisconsin Press, vol. 54(2), pages 187-206.
    10. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-333, April.
    11. Ihlanfeldt, Keith R., 2004. "The Use of an Econometric Model for Estimating Aggregate Levels of Property Tax Assessment Within Local Jurisdictions," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(1), pages 7-23, March.
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    Cited by:

    1. Patrick Bayer & Marcus D. Casey & Fernando Ferreira & Robert McMillan, 2012. "Estimating Racial Price Differentials in the Housing Market," NBER Working Papers 18069, National Bureau of Economic Research, Inc.
    2. Michael Dinkel, 2012. "Human behaviour - an underappreciated factor in real estate transaction analyses," ERES eres2012_108, European Real Estate Society (ERES).
    3. repec:eee:jhouse:v:36:y:2017:i:c:p:8-24 is not listed on IDEAS
    4. Kakar, Venoo & Franco, Julisa & Voelz, Joel & Wu, Julia, 2016. "Effects of Host Race Information on Airbnb Listing Prices in San Francisco," MPRA Paper 69974, University Library of Munich, Germany.
    5. Keith Ihlanfeldt & Tom Mayock, 2012. "Information, Search, and House Prices: Revisited," The Journal of Real Estate Finance and Economics, Springer, vol. 44(1), pages 90-115, January.
    6. Andersson, Fredrik & Mayock, Tom, 2014. "How does home equity affect mobility?," Journal of Urban Economics, Elsevier, vol. 84(C), pages 23-39.
    7. repec:eee:juecon:v:102:y:2017:i:c:p:91-105 is not listed on IDEAS

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