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The neighbor is king: Customer discrimination in the housing market

Author

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

Abstract

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.

Suggested Citation

  • Combes, Pierre-Philippe & Decreuse, Bruno & Schmutz, Benoît & Trannoy, Alain, 2012. "The neighbor is king: Customer discrimination in the housing market," CEPR Discussion Papers 9160, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9160
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    References listed on IDEAS

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    1. Zenou,Yves, 2009. "Urban Labor Economics," Cambridge Books, Cambridge University Press, number 9780521875387, March.
    2. Kevin Lang, 2007. "Introduction to Poverty and Discrimination," Introductory Chapters,in: Poverty and Discrimination Princeton University Press.
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    5. Zenou,Yves, 2009. "Urban Labor Economics," Cambridge Books, Cambridge University Press, number 9780521875387, March.
    6. 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(2-3), pages 99-114, September.
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    Citations

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    Cited by:

    1. Algan, Yann & Hémet, Camille & Laitin, David D., 2011. "Diversity and Public Goods: A Natural Experiment with Exogenous Residential Allocation," IZA Discussion Papers 6053, Institute for the Study of Labor (IZA).
    2. Gobillon, Laurent & Solignac, Matthieu, 2015. "Homeownership of immigrants in France: selection effects related to international migration flows," CEPR Discussion Papers 10975, C.E.P.R. Discussion Papers.
    3. Pierre-Philippe Combes & Bruno Decreuse & Morgane Laouénan & Alain Trannoy, 2016. "Customer Discrimination and Employment Outcomes: Theory and Evidence from the French Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 107-160.
    4. Auspurg, Katrin & Hinz, Thomas & Schmid, Laura, 2017. "Contexts and conditions of ethnic discrimination: Evidence from a field experiment in a German housing market," Journal of Housing Economics, Elsevier, vol. 35(C), pages 26-36.
    5. Laurent Gobillon & Matthieu Solignac, 2014. "Homeownership of immigrants in France," ERSA conference papers ersa14p558, European Regional Science Association.
    6. Yann Algan & Camille Hémet & David D. Laitin, 2016. "The Social Effects of Ethnic Diversity at the Local Level: A Natural Experiment with Exogenous Residential Allocation," Journal of Political Economy, University of Chicago Press, vol. 124(3), pages 696-733.
    7. Yann Algan & Camille Hémet & David Laitin, 2012. "The Social Effects of Ethnic Diversity at the Local Level," Working Papers hal-01171148, HAL.

    More about this item

    Keywords

    Customer Discrimination; Housing Market; Matching Frictions; Neighborhood Externalities;

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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