Title

Racial and ethnic discrimination in urban housing markets: Evidence from audit studies

Date of Award

2005

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

John Yinger

Keywords

Racial, Ethnic, Discrimination, Urban, Housing markets, Audit

Subject Categories

Economics | Race and Ethnicity | Social and Behavioral Sciences | Sociology

Abstract

Housing discrimination has historically been important in the United States. If it exists, discrimination is a major barrier to minority homeseekers. Based on national audit data from the 1989 and 2000 Housing Discrimination Studies and three different econometric techniques, this collection of essays examines a variety of discriminatory behaviors of real estate brokers.

The first essay, using a fixed-effects Poisson model, examines discrimination in the number of houses shown to homeseekers in 2000. Unlike previous studies, it takes into account auditors' actual socioeconomic characteristics to minimize the estimation bias. The results indicate that blacks and Hispanics are shown 30 and 10 percent fewer units, respectively, than whites. In contrast, no similar discrimination against Asians and Native Americans is found. The results also show that since 1989, discrimination against blacks has increased by 12 percentage points while discrimination against Hispanics has been unchanged. In addition, this paper finds that brokers discriminate mainly because of white customers' prejudice.

The second essay studies discrimination in discrete choices by brokers in 2000, using a fixed-effects logit model. The data set makes it possible to control for auditors' actual demographic and socioeconomic characteristics, along with the characteristics assigned for the purposes of the audit. The study finds that discrimination continues to be strong but also documents a downward trend in both the scope and incidence of discrimination since 1989. The estimations also identify both brokers' prejudice and white customers' prejudice as causes of discrimination.

In the third essay, a bivariate probit model is used to examine the current status of and recent changes in discrimination motives and brokers' marketing behaviors. The results show that black and Hispanic homebuyers are discriminated against because of the prejudice of both brokers and white customers. In addition, white customers' prejudice has increased over the last decade. Regarding brokers' marketing behaviors, the most striking results points to the existence of and an increasing trend in redlining (i.e., brokers withhold housing units in integrated neighborhoods from homeseekers).

As a whole, this collection of papers updates previous analysis, adds new empirical evidence to the literature, and has important policy implications.

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