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Price discrimination in the housing market

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  • Ihlanfeldt, Keith
  • Mayock, Tom

Abstract

There is little credible evidence on whether price discrimination exists in the housing market. Using a large sample of single-family home sales from Florida where both the race of the seller and buyer are known, we present evidence using the traditional and Harding et al. [HRS, Harding, J.P., Rosenthal, S., Sirmans, D.F., 2003. Establishing bargaining power in the market for existing homes. The Review of Economics and Statistics 85, (1) 178-188] approaches to empirical estimation. Omitted variable bias is found to plague the traditional approach. Results from following the HRS approach indicate that price discrimination exists by whites and Hispanics against blacks and Asians. Price discrimination against blacks is restricted to non-majority black neighborhoods and is smaller in magnitude in neighborhoods containing younger and more educated homeowners.

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  • Ihlanfeldt, Keith & Mayock, Tom, 2009. "Price discrimination in the housing market," Journal of Urban Economics, Elsevier, vol. 66(2), pages 125-140, September.
    • Handle: RePEc:eee:juecon:v:66:y:2009:i:2:p:125-140
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    References listed on IDEAS

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    Cited by:

    1. Patrick Bayer & Marcus D. Casey & Fernando Ferreira & Robert McMillan, 2012. "Estimating Racial Price Differentials in the Housing Market," NBER Working Papers 18069, National Bureau of Economic Research, Inc.
    2. Raffaele Grotti & Helen Russell & Bertrand Maître & Davide Gritti, 2024. "The Experience of Housing Discrimination and Housing Deprivation Across Social Groups in Ireland," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 175(1), pages 195-215, October.
    3. Grotti, Raffaele & Russell, Helen & Fahey, Éammon & Maître, Bertrand, 2018. "Discrimination and inequality in housing in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT361.
    4. Michael Dinkel, 2012. "Human behaviour - an underappreciated factor in real estate transaction analyses," ERES eres2012_108, European Real Estate Society (ERES).
    5. Vladimir Avetian, 2022. "Essays in economics of discrimination and diversity [Essais sur l’économie de la discrimination et de la diversité]," SciencePo Working papers Main tel-03858054, HAL.
    6. Kishor, N. Kundan & Konkel, Rebecca & Yoon, Jangsu & Zhao, Tian, 2023. "Bridging the racial disparity in wealth creation in Milwaukee," MPRA Paper 117686, University Library of Munich, Germany.
    7. Makovi, Michael, 2022. "Is There Discrimination in Property Taxation? Evidence from Atlanta, Georgia, 2010-2016," Journal of Housing Economics, Elsevier, vol. 56(C).
    8. S.B. Caudill & L. Ciucci & C. Detotto, 2024. "Bargaining power: Do individuals outperform groups?," Working Paper CRENoS 202419, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    9. Douglas Savitsky, 2012. "Is plea bargaining a rational choice? Plea bargaining as an engine of racial stratification and overcrowding in the United States prison system," Rationality and Society, , vol. 24(2), pages 131-167, May.
    10. Nicodemo, Catia & Raya, Josep M., 2018. "Does Juan Carlos or Nelson Obtain a Larger Price Cut in the Spanish Housing Market?," IZA Discussion Papers 11811, Institute of Labor Economics (IZA).
    11. Steegmans, Joep & Hassink, Wolter, 2017. "Financial position and house price determination: An empirical study of income and wealth effects," Journal of Housing Economics, Elsevier, vol. 36(C), pages 8-24.
    12. Kakar, Venoo & Franco, Julisa & Voelz, Joel & Wu, Julia, 2016. "Effects of Host Race Information on Airbnb Listing Prices in San Francisco," MPRA Paper 69974, University Library of Munich, Germany.
    13. Myongjin Kim & Brent Norwood & Sean O'Connor & Leilei Shen, 2019. "I am Jane. Do I pay more in the housing market?," Economics Bulletin, AccessEcon, vol. 39(2), pages 1612-1620.
    14. Keith Ihlanfeldt & Tom Mayock, 2012. "Information, Search, and House Prices: Revisited," The Journal of Real Estate Finance and Economics, Springer, vol. 44(1), pages 90-115, January.
    15. Geoffrey K. Turnbull & Arno J. van der Vlist, 2022. "Bargaining power and segmented markets: Evidence from rental and owner‐occupied housing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(5), pages 1307-1333, September.
    16. Natalya Bikmetova & Geoffrey K. Turnbull & Velma Zahirovic‐Herbert, 2023. "Ethnicity in housing markets: Buyers, sellers and agents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(1), pages 196-232, January.
    17. Wong, Francis & Kermani, Amir, 2022. "Racial Disparities in Housing Returns," VfS Annual Conference 2022 (Basel): Big Data in Economics 264099, Verein für Socialpolitik / German Economic Association.
    18. Andersson, Fredrik & Mayock, Tom, 2014. "How does home equity affect mobility?," Journal of Urban Economics, Elsevier, vol. 84(C), pages 23-39.
    19. Adam Nowak & Patrick Smith, 2017. "Agent Intermediation and Racial Price Differentials," Working Papers 17-21, Department of Economics, West Virginia University.
    20. Keith Ihlanfeldt & Cynthia Fan Yang, 2024. "Political and racial neighborhood sorting: How is it changing?," Public Choice, Springer, vol. 198(1), pages 161-187, January.
    21. 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.
    22. Mayock, Tom & Malacrida, Rachel Spritzer, 2018. "Socioeconomic and racial disparities in the financial returns to homeownership," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 80-96.
    23. John Yinger, 2016. "Hedonic Estimates of Neighborhood Ethnic Preferences," Public Finance Review, , vol. 44(1), pages 22-51, January.
    24. Lei Zhang & Tammy Leonard, 2021. "External validity of hedonic price estimates: Heterogeneity in the price discount associated with having Black and Hispanic neighbors," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 62-85, January.

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