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Racial Segregation in Housing Markets and the Erosion of Black Wealth

Author

Listed:
  • Prottoy A. Akbar

    (Aalto University and Helsinki Graduate School of Economics)

  • Sijie Li Hickly

    (Freddie Mac)

  • Allison Shertzer

    (Federal Reserve Bank of Philadelphia)

  • Randall P. Walsh

    (University of Pittsburgh and NBER)

Abstract

This paper studies how the expansion of segregated neighborhoods eroded black wealth in prewar American cities. Using a novel sample of matched addresses, we find that over a single decade rental prices soared by roughly 50% on city blocks that transitioned from all white to majority black. Meanwhile, pioneering black families paid a 28% premium to buy a home on a majority white block, after which their homes lost 10% of their value. These findings strongly suggest that segregated housing markets cost black families much of the gains associated with moving north during the Great Migration.

Suggested Citation

  • Prottoy A. Akbar & Sijie Li Hickly & Allison Shertzer & Randall P. Walsh, 2025. "Racial Segregation in Housing Markets and the Erosion of Black Wealth," The Review of Economics and Statistics, MIT Press, vol. 107(1), pages 42-54, January.
    • Handle: RePEc:tpr:restat:v:107:y:2025:i:1:p:42-54
    DOI: 10.1162/rest_a_01276
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