"A recent study by Patrick Bayer, from Duke University, and his coauthors have established convincingly that African-Americans pay higher sales prices than whites for identical units in the same neighborhood. Understanding racial rent differences is even more important since nearly 60 percent of black households are renters.
Our new study, Racial Rent Differences in U.S. Housing Markets: Evidence from the Housing Voucher Program, fills this gap. Using data from rental units in 2000-2002 across all metropolitan areas of the country and the non-metropolitan areas of each state, we estimate racial differences in the rents paid for identical housing in the same neighborhood and show how they vary with neighborhood racial composition.
Our results indicate that households led by African-Americans pay more for identical housing in identical neighborhoods than their white counterparts, and that this rent premium increases as neighborhoods get whiter...
We know much more about the extent of discrimination than the causes and our data do not allow us to determine the mechanisms that lead to the racial rent premiums we detect. That said, two explanations fit with our results. Landlords charging different rents based on race almost surely explains some of racial rent premiums, but our primary explanation for racial rent differences is not based on that presumption. It is based on the idea that blacks search less in the whitest areas and hence tend to rent overpriced units in those neighborhoods."
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