Equal Price for Equal Place? Demand-Driven Racial Discrimination in the Housing Market

We presented participants to an online study in Luxembourg with fictitious real-estate advertisements, tasking them to appraise the described properties. A random subset was also shown sellers’ surnames, strongly framed to signal their origins. All else equal, sellers with sub- Saharan African surnames were systematically offered lower prices – amounting to an appraisal penalty of EUR 20,000. This figure is highly heterogeneous and can amount up to around EUR 58,000 for older and low-educated participants. We provide evidence that the appraisal bias likely passes through onto final sales prices and that it may be largely due to statistical rather than taste- based discrimination.