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Neighbor Discrimination: Theory and evidence from the French rental market

Author

Listed:
  • Pierre-Philippe Combes

    (Département d'économie)

  • Bruno Decreuse

    (Groupement de Recherche en Économie Quantitative d'Aix-Marseille)

  • Benoît, Department Of Economics) Schmutz

    (2441/vcs597o2o8tpqsfunpbgvptj7)

  • Alain Trannoy

    (Aix-Marseille School of Economics)

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 living in public housing, whereas this is not the case of other demographic groups.

Suggested Citation

  • Pierre-Philippe Combes & Bruno Decreuse & Benoît, Department Of Economics) Schmutz & Alain Trannoy, 2015. "Neighbor Discrimination: Theory and evidence from the French rental market," Sciences Po publications 9160, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/6tj1d1vl8a8goacd5b3ogpmn8j
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    File URL: http://spire.sciencespo.fr/hdl:/2441/6tj1d1vl8a8goacd5b3ogpmn8j/resources/neighbour-discrimination-cepr-dp9160updated.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Kevin Lang, 2007. "Introduction to Poverty and Discrimination," Introductory Chapters,in: Poverty and Discrimination Princeton University Press.
    3. 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.
    4. 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.
    5. Sasaki, Masaru, 1999. "An Equilibrium Search Model with Coworker Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 377-407, April.
    6. Asa Rosen, 2003. "Search, Bargaining, and Employer Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 807-830, October.
    7. 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.
    8. Paul E. Carrillo, 2012. "An Empirical Stationary Equilibrium Search Model Of The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(1), pages 203-234, February.
    9. James Albrecht & Axel Anderson & Eric Smith & Susan Vroman, 2007. "Opportunistic Matching In The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 641-664, May.
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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.

    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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