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Disparities in Pollution Capitalization Rates: The Role of Direct & Systemic Discrimination

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  • Joshua Graff Zivin
  • Gregor Singer

Abstract

We examine how exogenous changes in exposure to air pollution over the past two decades have altered the disparities in home values between Black and White homeowners. We find that air quality capitalization rates are significantly lower for Black homeowners. In fact, they are so much lower that, despite secular reductions in the Black-White pollution exposure gap, disparities in housing values have increased during this period. An exploration of mechanisms suggests that roughly two-thirds of this difference is the result of direct discrimination while the remaining one-third can be attributed to systemic discrimination.

Suggested Citation

  • Joshua Graff Zivin & Gregor Singer, 2024. "Disparities in Pollution Capitalization Rates: The Role of Direct & Systemic Discrimination," CESifo Working Paper Series 11555, CESifo.
    • Handle: RePEc:ces:ceswps:_11555
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    References listed on IDEAS

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    5. Jonathan M. Colmer & Suvy Qin & John L. Voorheis & Reed Walker, 2024. "Income, Wealth, and Environmental Inequality in the United States," NBER Working Papers 33050, National Bureau of Economic Research, Inc.
    6. Abdulrahman Jbaily & Xiaodan Zhou & Jie Liu & Ting-Hwan Lee & Leila Kamareddine & Stéphane Verguet & Francesca Dominici, 2022. "Air pollution exposure disparities across US population and income groups," Nature, Nature, vol. 601(7892), pages 228-233, January.
    7. Patrick Bajari & Jane Cooley Fruehwirth & Kyoo il Kim & Christopher Timmins, 2012. "A Rational Expectations Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes: The Price of Pollution," American Economic Review, American Economic Association, vol. 102(5), pages 1898-1926, August.
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    More about this item

    Keywords

    house prices; environmental justice; air pollution; race; discrimination;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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