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Neighbor Discrimination Theory and evidence from the French rental market

Author

Listed:
  • Pierre-Philippe Combes

    () (Aix-Marseille University, CNRS, EHESS)

  • Benoît Schmutz

    () (Aix-Marseille University, CNRS, EHESS)

  • Bruno Decreuse

    () (CREST, Howard University)

  • Alain Trannoy

    () (Aix-Marseille University, CNRS, EHESS)

Abstract

This paper describes a novel concept of customer discrimination in the housing market, neighbor discrimination. We build up a matching model with ethnic externalities where landlords differ in the number of apartments they own within the same building. Larger landlords discriminate more often only if some tenants are prejudiced against the minority group. Testing the null hypothesis whereby minority tenants are equally likely to have a large landlord provides a natural test for the existence of neighbor discrimination. In an empirical application, we show that this null hypothesis is rejected for African immigrants in the French private rental market. We then show that the local proportion of large landlords is positively correlated with African tenants’ probability of being con?ned to public housing projects, whereas this is not the case of other demographic groups.

Suggested Citation

  • Pierre-Philippe Combes & Benoît Schmutz & Bruno Decreuse & Alain Trannoy, 2016. "Neighbor Discrimination Theory and evidence from the French rental market," Working Papers 2016-36, Center for Research in Economics and Statistics.
  • Handle: RePEc:crs:wpaper:2016-36
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    References listed on IDEAS

    as
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    Cited by:

    1. Mathieu Bunel & Yannick L'Horty & Loïc du Parquet & Pascale Petit, 2017. "Les discriminations dans l’accès au logement à Paris : Une expérience contrôlée," TEPP Research Report 2017-01, TEPP.
    2. repec:eee:jhouse:v:40:y:2018:i:c:p:6-24 is not listed on IDEAS

    More about this item

    Keywords

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

    JEL classification:

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

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