The Neighbor is King: Customer Discrimination in the Housing Market

The Neighbor is King: Customer Discrimination in the Housing Market

[SHS:ECO] Humanities and Social Sciences/Economy and finances

Customer Discrimination

Matching frictions

Neighborhood Externalities

Housing Market

This paper provides a method to single out customer-based discrimination in the housing market. We build a matching model with ethnic externalities where landlords differ in the number of housing units they own within the same building. Multiple-dwelling landlords discriminate more often than single-dwelling landlords only if some tenants are prejudiced against the minority group. By testing the null hypothesis whereby minority tenants are equally likely to have a multiple-dwelling landlord, we can test whether there is customer discrimination or not. We run the test on French data and show evidence of customer discrimination in the rental market.

Combes, Pierre-Philippe

Decreuse, Bruno

Schmutz, Benoît

Trannoy, Alain

2012-09

ENG

preprint

http://halshs.archives-ouvertes.fr/halshs-00793403

http://halshs.archives-ouvertes.fr/docs/00/79/34/03/PDF/WP_2012_-_Nr_24.pdf