College of Business and Economics
Most housing transactions are brokered wherein the buyer and seller do not meet in person. In which case the buyer’s race is not revealed to the seller, so the seller cannot discriminate based on race. Despite this observation, previous studies ﬁnd racial price diﬀerentials based on the race of the buyer. We provide evidence that these estimates suﬀer from an omitted variable bias attributable to the time-varying attributes of the house. After controlling for the time-varying attributes of the house, we ﬁnd that minority (black and Hispanic) and non-minority (white) buyers pay a similar price for comparable housing. We also examine whether agent intermediation provides a channel through which diﬀerential treatment can occur. We ﬁnd no evidence of racial price diﬀerentials at the agent level.
Digital Commons Citation
Nowak, Adam and Smith, Patrick S., "Agent Intermediation and Racial Price Differences" (2017). Economics Faculty Working Papers Series. 24.