IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/halshs-00793403.html
   My bibliography  Save this paper

The Neighbor is King: Customer Discrimination in the Housing Market

Author

Listed:
  • Pierre-Philippe Combes

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Bruno Decreuse

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Benoît Schmutz

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, GU - Georgetown University [Washington])

  • Alain Trannoy

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

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

  • Pierre-Philippe Combes & Bruno Decreuse & Benoît Schmutz & Alain Trannoy, 2012. "The Neighbor is King: Customer Discrimination in the Housing Market," Working Papers halshs-00793403, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00793403
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00793403
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-00793403/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gabriel Desgranges & Étienne Wasmer, 2000. "Appariements sur le marché du logement," Annals of Economics and Statistics, GENES, issue 58, pages 253-287.
    2. 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.
    3. John Yinger, 1998. "Evidence on Discrimination in Consumer Markets," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 23-40, Spring.
    4. Dominique Goux & Eric Maurin, 2007. "Close Neighbours Matter: Neighbourhood Effects on Early Performance at School," Economic Journal, Royal Economic Society, vol. 117(523), pages 1193-1215, October.
    5. repec:adr:anecst:y:2000:i:58:p:11 is not listed on IDEAS
    6. 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.
    7. Hellerstein, Judith K. & Neumark, David & McInerney, Melissa, 2008. "Spatial mismatch or racial mismatch?," Journal of Urban Economics, Elsevier, vol. 64(2), pages 464-479, September.
    8. Gary A. Dymski, 2006. "Discrimination in the Credit and Housing Markets: Findings and Challenges," Chapters, in: William M. Rodgers III (ed.), Handbook on the Economics of Discrimination, chapter 8, Edward Elgar Publishing.
    9. 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.
    10. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June.
    11. 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.
    12. 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.
    13. Romain Aeberhardt & Denis Fougère & Julien Pouget & Roland Rathelot, 2010. "Wages and employment of French workers with African origin," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 881-905, June.
    14. repec:adr:anecst:y:2012:i:107-108:p:3 is not listed on IDEAS
    15. Yinger, John, 1986. "Measuring Racial Discrimination with Fair Housing Audits: Caught in the Act," American Economic Review, American Economic Association, vol. 76(5), pages 881-893, December.
    16. 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.
    17. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(1), pages 177-218.
    18. 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.
    19. 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.
    20. Zenou,Yves, 2009. "Urban Labor Economics," Cambridge Books, Cambridge University Press, number 9780521698221.
    21. Kevin Lang, 2007. "Introduction to Poverty and Discrimination," Introductory Chapters, in: Poverty and Discrimination, Princeton University Press.
    22. Bruno Decreuse & Benoît Schmutz, 2012. "Residential Mobility and Unemployment of African Immigrants in France: A Calibration Approach," Annals of Economics and Statistics, GENES, issue 107-108, pages 51-91.
    23. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, September.
    24. 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.
    25. John F. Kain, 1968. "Housing Segregation, Negro Employment, and Metropolitan Decentralization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(2), pages 175-197.
    26. repec:hal:wpspec:info:hdl:2441/8988 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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 of Labor Economics (IZA).
    2. repec:hal:spmain:info:hdl:2441/4rm8ji0nae9elbggr366la3786 is not listed on IDEAS
    3. Laurent Gobillon & Matthieu Solignac, 2020. "Homeownership of immigrants in France: selection effects related to international migration flows [A nation of immigrants: assimilation and economic outcomes in the age of mass migration]," Journal of Economic Geography, Oxford University Press, vol. 20(2), pages 355-396.
    4. Yann Algan & Camille Hémet & David Laitin, 2012. "Diversity and local public goods: a natural experiment with exogenous residential allocation," Working Papers 2012/24, Institut d'Economia de Barcelona (IEB).
    5. repec:hal:spmain:info:hdl:2441/6lcb7ovms687vbos73r9r0is5g is not listed on IDEAS
    6. 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.
    7. 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.
    8. Laurent Gobillon & Matthieu Solignac, 2014. "Homeownership of immigrants in France," ERSA conference papers ersa14p558, European Regional Science Association.
    9. 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.
    10. 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.
    11. Yann Algan & Camille Hémet & David Laitin, 2012. "The Social Effects of Ethnic Diversity at the Local Level," SciencePo Working papers Main hal-01171148, HAL.
    12. 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.
    13. 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.
    14. Yann Algan & Camille Hémet & David Laitin, 2012. "The Social Effects of Ethnic Diversity at the Local Level," Working Papers hal-01171148, HAL.
    15. 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.
    16. repec:hal:spmain:info:hdl:2441/30a25e1csn8pqrmbq8oije0o6j is not listed on IDEAS
    17. repec:hal:spmain:info:hdl:2441/2tlvpn71ve888pnch88db9g683 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Combes, Pierre-Philippe & Decreuse, Bruno & Schmutz, Benoît & Trannoy, Alain, 2018. "Neighbor discrimination theory and evidence from the French rental market," Journal of Urban Economics, Elsevier, vol. 104(C), pages 104-123.
    2. repec:hal:spmain:info:hdl:2441/6tj1d1vl8a8goacd5b3ogpmn8j is not listed on IDEAS
    3. 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.
    4. Carlsson, Magnus & Eriksson, Stefan, 2014. "Discrimination in the rental market for apartments," Journal of Housing Economics, Elsevier, vol. 23(C), pages 41-54.
    5. Combes, Pierre-Philippe & Decreuse, Bruno & Schmutz, Benoît & Trannoy, Alain, 2018. "Neighbor discrimination theory and evidence from the French rental market," Journal of Urban Economics, Elsevier, vol. 104(C), pages 104-123.
    6. Stephen L. Ross, 2003. "What Is Known about Testing for Discrimination: Lessons Learned by Comparing across Different Markets," Working papers 2003-21, University of Connecticut, Department of Economics, revised Nov 2003.
    7. Hanson, Andrew & Hawley, Zackary, 2014. "Where does racial discrimination occur? An experimental analysis across neighborhood and housing unit characteristics," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 94-106.
    8. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pellizzari, 2015. "Immigration, Housing Discrimination and Employment," Economic Journal, Royal Economic Society, vol. 125(586), pages 82-114, August.
    9. Bosch, Mariano & Carnero, M. Angeles & Farré, Lídia, 2010. "Information and discrimination in the rental housing market: Evidence from a field experiment," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 11-19, January.
    10. 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.
    11. Bayer, Patrick & Casey, Marcus & Ferreira, Fernando & McMillan, Robert, 2017. "Racial and ethnic price differentials in the housing market," Journal of Urban Economics, Elsevier, vol. 102(C), pages 91-105.
    12. Souleymane Mbaye, 2019. "Trois évaluations d’actions de lutte contre les discriminations," Erudite Ph.D Dissertations, Erudite, number ph19-01 edited by Pascale Petit, December.
    13. Stephen L. Ross, 2005. "The Continuing Practice and Impact of Discrimination," Working papers 2005-19, University of Connecticut, Department of Economics, revised Jul 2006.
    14. Sylvain Chareyron & Samuel Gorohouna & Yannick L'Horty & Pascale Petit & Catherine Ris, 2019. "Seeking for tipping point in the housing market : evidence from a field experiment," Working Papers hal-02334132, HAL.
    15. Gobillon, Laurent & Rupert, Peter & Wasmer, Etienne, 2014. "Ethnic unemployment rates and frictional markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 108-120.
    16. Mathieu Bunel & Samuel Gorohouna & Yannick L'Horty & Pascale Petit & Catherine Ris, 2016. "Discriminations ethniques dans l’accès au logement : une expérimentation en Nouvelle-Calédonie," TEPP Research Report 2016-08, TEPP.
    17. Mariano Bosch & M. Carnero & Lídia Farré, 2015. "Rental housing discrimination and the persistence of ethnic enclaves," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(2), pages 129-152, June.
    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. Chareyron, Sylvain & L'Horty, Yannick & Mbaye, Souleymane & Petit, Pascale, 2023. "Reducing ethnic discrimination through formal warning: Evidence from two combined field experiments," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    20. Beatty, Timothy K.M. & Sommervoll, Dag Einar, 2012. "Discrimination in rental markets: Evidence from Norway," Journal of Housing Economics, Elsevier, vol. 21(2), pages 121-130.
    21. Picard, Pierre M. & Zenou, Yves, 2018. "Urban spatial structure, employment and social ties," Journal of Urban Economics, Elsevier, vol. 104(C), pages 77-93.

    More about this item

    Keywords

    Housing Market; Customer Discrimination; Matching frictions; Neighborhood Externalities;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-00793403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.