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A household-level decomposition of the white–black homeownership gap

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  • Fesselmeyer, Eric
  • Le, Kien T.
  • Seah, Kiat Ying

Abstract

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.

Suggested Citation

  • Fesselmeyer, Eric & Le, Kien T. & Seah, Kiat Ying, 2012. "A household-level decomposition of the white–black homeownership gap," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 52-62.
  • Handle: RePEc:eee:regeco:v:42:y:2012:i:1:p:52-62
    DOI: 10.1016/j.regsciurbeco.2011.05.002
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    References listed on IDEAS

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    Cited by:

    1. Juan Ming & Jiachun Liu & Zicheng Wang, 2020. "Does the Homeownership Gap Between Rural–Urban Migrants and Urban–Urban Migrants in China Vary by Income?," SAGE Open, , vol. 10(4), pages 21582440209, November.
    2. Fesselmeyer, Eric & Le, Kien T. & Seah, Kiat Ying, 2013. "Changes in the white–black house value distribution gap from 1997 to 2005," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 132-141.
    3. Tao Chen & John P. Harding, 2016. "Changing Tastes: Estimating Changing Attribute Prices in Hedonic and Repeat Sales Models," The Journal of Real Estate Finance and Economics, Springer, vol. 52(2), pages 141-175, February.
    4. Laurent Gobillon & Matthieu Solignac, 2014. "Homeownership of immigrants in France," ERSA conference papers ersa14p558, European Regional Science Association.
    5. Li, Phillip & Mayock, Tom, 2019. "Mortgage characteristics and the racial incidence of default," Journal of Housing Economics, Elsevier, vol. 46(C).

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    More about this item

    Keywords

    Homeownership; Race; Segregation;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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