Measuring Discrimination in Spatial Equilibrium: 100 Years of Japan's Invisible Race

This paper provides a novel revealed-preference estimate of the severeness of discrimination over 100 years, focusing on buraku discrimination in Japan. Buraku discrimination is distinctive in that the risk of being identified as the discriminated group member crucially depends on whether one lives in certain areas (buraku areas), implying that the risk is indirectly traded in the land market. This feature allows us to measure the cost of discrimination risk as the capitalization into land prices. We estimate it using the new land price data of Kyoto spanning from 1912 to 2018 and a border design. We find that the land price discount of buraku areas was 53% in 1912 and 14% in 2018. The discount had declined in the 20th century but the decline has stopped in the 21st century. These results indicate the severe buraku discrimination, especially in the past, and its strong persistence.