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The neighbor is king: Customer discrimination in the housing market

  • Combes, Pierre-Philippe
  • Decreuse, Bruno
  • Schmutz, Benoît
  • Trannoy, Alain

This paper provides a method to single out customer-based discrimination in the housing market. We build a matching model with ethnic externalities where landlords differ in the number of housing units they own within the same building. Multiple-dwelling landlords discriminate more often than single-dwelling landlords only if some tenants are prejudiced against the minority group. By testing the null hypothesis whereby minority tenants are equally likely to have a multiple-dwelling landlord, we can test whether there is customer discrimination or not. We run the test on French data and show evidence of customer discrimination in the rental market.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9160.

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Date of creation: Sep 2012
Date of revision:
Handle: RePEc:cpr:ceprdp:9160
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  1. Gary A. Dymski, 2006. "Discrimination in the Credit and Housing Markets: Findings and Challenges," Chapters, in: Handbook on the Economics of Discrimination, chapter 8 Edward Elgar.
  2. Bruno DECREUSE & Benoît SCHMUTZ, 2012. "Residential Mobility and Unemployment of African Immigrants in France : a Calibration Approach," Annales d'Economie et de Statistique, ENSAE, issue 107-108, pages 3.
  3. 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.
  4. Kevin Lang, 2007. "Introduction to Poverty and Discrimination
    [Poverty and Discrimination]
    ," Introductory Chapters, Princeton University Press.
  5. Judith K. Hellerstein & David Neumark & Melissa McInerney, 2007. "Spatial Mismatch or Racial Mismatch?," NBER Working Papers 13161, National Bureau of Economic Research, Inc.
  6. Dominique Goux & Eric Maurin, 2006. "Close neighbours matter: neighbourhood effects on early performance at school," LSE Research Online Documents on Economics 19412, London School of Economics and Political Science, LSE Library.
  7. Ahmed, Ali M. & Hammarstedt, Mats, 2008. "Discrimination in the rental housing market: A field experiment on the Internet," Journal of Urban Economics, Elsevier, vol. 64(2), pages 362-372, September.
  8. 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.
  9. Zhao, Bo & Ondrich, Jan & Yinger, John, 2006. "Why do real estate brokers continue to discriminate? Evidence from the 2000 Housing Discrimination Study," Journal of Urban Economics, Elsevier, vol. 59(3), pages 394-419, May.
  10. Aeberhardt, Romain & Fougère, Denis & Pouget, Julien & Rathelot, Roland, 2007. "Wages and Employment of French Workers with African Origin," IZA Discussion Papers 2898, Institute for the Study of Labor (IZA).
  11. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, MIT Press, vol. 123(1), pages 177-218, 02.
  12. Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
  13. Uri Gneezy & John List & Michael K. Price, 2012. "Toward an Understanding of Why People Discriminate: Evidence from a Series of Natural Field Experiments," NBER Working Papers 17855, National Bureau of Economic Research, Inc.
  14. Gabriel DESGRANGES & Étienne WASMER, 2000. "Appariements sur le marché du logement," Annales d'Economie et de Statistique, ENSAE, issue 58, pages 253-287.
  15. repec:cup:cbooks:9780521875387 is not listed on IDEAS
  16. Hanson, Andrew & Hawley, Zackary, 2011. "Do landlords discriminate in the rental housing market? Evidence from an internet field experiment in US cities," Journal of Urban Economics, Elsevier, vol. 70(2), pages 99-114.
  17. Kerwin Kofi Charles & Jonathan Guryan, 2008. "Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 773-809, October.
  18. Stephen L. Ross, 2008. "Understanding Racial Segregation: What is known about the Effect of Housing Discrimination," Working papers 2008-15, University of Connecticut, Department of Economics, revised Nov 2008.
  19. John Yinger, 1998. "Evidence on Discrimination in Consumer Markets," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 23-40, Spring.
  20. Ondrich, Jan & Stricker, Alex & Yinger, John, 1999. "Do Landlords Discriminate? The Incidence and Causes of Racial Discrimination in Rental Housing Markets," Journal of Housing Economics, Elsevier, vol. 8(3), pages 185-204, September.
  21. repec:cup:cbooks:9780521698221 is not listed on IDEAS
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