Abstract: Paper No. 188

Discrimination in Qualitative Actions by Real Estate Brokers

Jan Ondrich, Alex Stricker, and John M. Yinger

May 1998 

Discrimination occurs when people in a particular class are systematically treated less favorably than other equally qualified people. This study focuses on racial and ethnic discrimination in qualitative actions by real estate brokers, such as showing a customer a housing unit that was advertised in the newspaper. The data come from the Housing Discrimination Study, which conducted over 2,000 fair housing audits of real estate brokers in 25 metropolitan areas in 1989. Each audit consists of a visit to a real estate agency by a white person and either a black or Hispanic person with similar socio-economic characteristics. Using Chamberlain's fixed-effects logit estimation, we develop a nationally representative measure of the incidence of discrimination in broker behavior and conduct hypothesis tests on the incidence and causes of discrimination. The results indicate widespread discrimination and support the hypotheses that brokers discriminate both out of personal prejudice and in response to the prejudice of present and future white clients

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