Working Paper: CEPR ID: DP9160
Authors: Pierre-Philippe Combes; Bruno Decreuse; Benot Schmutz; Alain Trannoy
Abstract: 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.
Keywords: Customer discrimination; Housing market; Matching frictions; Neighborhood externalities
JEL Codes: J71; R21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| number of housing units owned by landlords (R21) | likelihood to discriminate against minority tenants (J15) |
| multiple-dwelling landlords (R21) | likelihood to discriminate against black tenants (J71) |
| presence of prejudiced white tenants (R21) | likelihood to discriminate against black tenants (J71) |
| non-European origin (F29) | likelihood of having a multiple-dwelling landlord (R21) |