The Cost of Housing in Black Neighborhoods

This paper reports the findings of a national study of black-white differentials in housing consumption. The main issue explored is whether blacks pay higher prices and/or consume different residential packages than whites as a result of racial discrimination and segregation. When blacks living in white neighborhoods were compared with whites, it was found that blacks purchased different residential packages and paid different prices for the attributes contained in their respective packages. These differences are shown to have resulted from whites' higher income levels, different housing preferences, and willingness to pay a premium for housing in white neighborhoods. When blacks living in black neighborhoods were compared with blacks living in mixed neighborhoods, it was found that the former purchased smaller quantities of residential services, but paid higher prices. These differences viere found to result from variations in the elasticity of the supply of housing for black occupancy and from variations in the residential packages consumed. I. THE COST OF HOUSING IN BLACK NEIGHBORHOODS