‘Untouchable’ Housing? Caste and House Prices in Rural Nepal

Caste-based discrimination is prohibited by law in Nepal. However, it remains deeply entrenched in Nepalese society, leading to widespread discrimination against lower castes, particularly Dalits, in various social and economic activities. This research aims to examine disparities in house prices between Dalits and non-Dalits using a hedonic price model. To accomplish this, we utilize demographic data, self-reported information on house attributes and house prices from the 2018 wave of the Household Risk and Vulnerability Survey (HRVS). The findings indicate that Dalit-owned houses are priced significantly lower than houses owned by Kshatriyas and Brahmins, even after accounting for all relevant house characteristics. Propensity score matching analysis reveals that this Dalit discount ranges from 11% to 16%, translating to a reduction of NRs 123,000 to NRs 174,000 for Dalit-owned houses compared to non-Dalit-owned houses. Furthermore, the analysis across regions suggests that house price differentials between Dalits and non-Dalits are less prevalent in the southern plains and urban areas than in mountainous and rural regions. One possible explanation for this housing price differential is the limited demand for Dalit-owned houses in the mountains and rural areas due to their smaller market size.