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Now You See It, Now You Don't: Why Do Real Estate Agents Withhold Available Houses from Black Customers?


  • Jan Ondrich

    (Center for Policy Research, Syracuse University)

  • Stephen Ross

    (University of Connecticut)

  • John Yinger

    (Center of Policy Research, Syracuse University)


Potential home buyers may initiate contact with a real estate agent by asking to see a particular advertised house. This paper asks whether an agent's response to such a request depends on the race of the buyer or on whether the house is located in an integrated neighborhood. Like previous research about the causes of housing discrimination, this paper uses data from fair housing audits, a matched-pair technique for comparing the treatment of equally qualified black and white home buyers. However, we shift the focus from differences in the treatment of paired buyers to agent decisions concerning an individual house. Using a sample of all houses seen during the 1989 national Housing Discrimination Study, we estimate a random-effect, multinomial logit model to explain a real estate agent's joint decisions concerning whether to show each house to a black auditor and to a white auditor. We find evidence that agents interpret an initial housing request as an indication of a customer's preferences, but also are more likely to withhold a house from all customers when it is in an integrated suburban neighborhood (redlining). Moreover, agents' marketing efforts increase with asking price for white, but not for black, customers; blacks are more likely than whites to see houses in suburban, integrated areas (steering); and the houses agents show are more likely to deviate from the initial request when the customer is black than when the customer is white. These three findings are consistent with the possibility that agents act upon the belief that some types of transactions are relatively unlikely for black customers (statistical discrimination). © 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Jan Ondrich & Stephen Ross & John Yinger, 2003. "Now You See It, Now You Don't: Why Do Real Estate Agents Withhold Available Houses from Black Customers?," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 854-873, November.
  • Handle: RePEc:tpr:restat:v:85:y:2003:i:4:p:854-873

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    References listed on IDEAS

    1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    2. George Galster, 1990. "Racial steering in urban housing markets: A review of the audit evidence," The Review of Black Political Economy, Springer;National Economic Association, vol. 18(3), pages 105-129, December.
    3. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, March.
    4. Turner, Margery Austin & Mikelsons, Maris, 1992. "Patterns of racial steering in four metropolitan areas," Journal of Housing Economics, Elsevier, vol. 2(3), pages 199-234, September.
    5. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section..
    6. Yinger, John, 1997. "Cash in Your Face: The Cost of Racial and Ethnic Discrimination in Housing," Journal of Urban Economics, Elsevier, vol. 42(3), pages 339-365, November.
    7. Helen F. Ladd, 1998. "Evidence on Discrimination in Mortgage Lending," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 41-62, Spring.
    8. Courant, Paul N., 1978. "Racial prejudice in a search model of the urban housing market," Journal of Urban Economics, Elsevier, vol. 5(3), pages 329-345, July.
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    10. Page Marianne, 1995. "Racial and Ethnic Discrimination in Urban Housing Markets: Evidence from a Recent Audit Study," Journal of Urban Economics, Elsevier, vol. 38(2), pages 183-206, September.
    11. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    12. Canopy Roychoudhury & Allen C. Goodman, 1996. "Evidence of Racial Discrimination in Different Dimensions of Owner-Occupied Housing Search," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 24(2), pages 161-178.
    13. Ondrich, Jan & Ross, Stephen L. & Yinger, John, 2000. "How Common is Housing Discrimination? Improving on Traditional Measures," Journal of Urban Economics, Elsevier, vol. 47(3), pages 470-500, May.
    14. Roychoudhury, Canopy & Goodman, Allen C., 1992. "An ordered probit model for estimating racial discrimination through fair housing audits," Journal of Housing Economics, Elsevier, vol. 2(4), pages 358-373, December.
    15. Harriet Newburger, 1995. "Sources of Difference in Information Used by Black and White Housing Seekers: An Exploratory Analysis," Urban Studies, Urban Studies Journal Limited, vol. 32(3), pages 445-470, April.
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    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy


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