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The impact of real Estate Market knowledge on tenure choice: A comparison of black and white households

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  • Donald R. Haurin
  • Hazel A. Morrow‐Jones

Abstract

Homeownership is an important social and financial achievement for most U.S. households. Various explanations have been offered for the large and persistent gap in the ownership rates of black and white households, but studies have consistently fallen short of identifying all of the causes. The data we used were derived from a survey of the residents of the Columbus, OH, area. We argue that differences in real estate market knowledge and information affect the tenure choice decisions of black and white households. We estimate a model that is augmented to include a measure of real estate knowledge and find that additional knowledge increases the likelihood of homeownership. This holds even when we account for the endogeneity of such knowledge. We conclude that differences in real estate knowledge contribute to explaining the racial gap in homeownership rates, a finding that can be addressed through public policy interventions such as counseling programs.

Suggested Citation

  • Donald R. Haurin & Hazel A. Morrow‐Jones, 2006. "The impact of real Estate Market knowledge on tenure choice: A comparison of black and white households," Housing Policy Debate, Taylor & Francis Journals, vol. 17(4), pages 625-653, January.
    • Handle: RePEc:taf:houspd:v:17:y:2006:i:4:p:625-653
    DOI: 10.1080/10511482.2006.9521584
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    References listed on IDEAS

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    1. Courchane, Marsha & Gailey, Adam & Zorn, Peter, 2008. "Consumer credit literacy: What price perception," Journal of Economics and Business, Elsevier, vol. 60(1-2), pages 125-138.
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    Cited by:

    1. Ha, Sejeong & Hilber, Christian A.L. & Schöni, Olivier, 2021. "Do long-distance moves discourage homeownership? Evidence from England," Journal of Housing Economics, Elsevier, vol. 53(C).
    2. Abdul Rahim, Husniyah & Md. Jusoh, Zuroni & Abdul Samad, M. Fazilah, 2012. "Predictors of Investment in Risky Assets among Malaysian Families," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 46(1), pages 27-37.
    3. Gathergood, John & Weber, Jörg, 2017. "Financial literacy: A barrier to home ownership for the young?," Journal of Urban Economics, Elsevier, vol. 99(C), pages 62-78.

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