Working Paper: NBER ID: w30814
Authors: Joshua S. 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 one-quarter of this difference is the result of direct discrimination while the remaining three-quarters can be attributed to systemic discrimination through differential access to complementary amenities.
Keywords: pollution; housing values; discrimination; environmental justice
JEL Codes: J15; Q53; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| PM2.5 concentrations (Y10) | price per square foot (psqft) of housing (R31) |
| PM2.5 concentrations (Y10) | black capitalization rate (D33) |
| PM2.5 concentrations (Y10) | NHW capitalization rate (G19) |
| difference in black capitalization rate (G19) | black-white housing value gap (R21) |
| black capitalization rate (D33) | house values for black homeowners (R21) |
| direct discrimination (J71) | black capitalization rate difference (D33) |
| systemic discrimination (J71) | black capitalization rate difference (D33) |