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  1. Home
  2. ASSA Annual Meeting
  3. 2023
  4. Program
  5. Race, Gender, and Inequality
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Race, Gender, and Inequality

Paper Session

Friday, Jan. 6, 2023 10:15 AM - 12:15 PM (CST)

Sheraton New Orleans, Bayside C
Hosted By: American Real Estate and Urban Economics Association
  • Chair: Nitzan Tzur-Ilan, Federal Reserve Bank of Dallas

Do Appraiser and Borrower Race Affect Valuation?

Brent W. Ambrose
,
Pennsylvania State University
James Conklin
,
University of Georgia
Edward Coulson
,
University of California-Irvine
Moussa Diop
,
University of Southern California
Luis A. Lopez
,
University of Illinois-Chicago

Abstract

"Following concerns about undervaluation of minority-owned homes, we examine

the incidence of racial appraisal bias using a nationwide sample of refinanced mortgages

from 2000 to 2007. A unique feature of our data is that they allow us to observe

the race of the both the homeowner and the appraiser. While we do observe systematic

lower appraised values relative to automated valuation model (AVM) estimates for

minority-owned homes, we do not find evidence that white and minority appraisers

provide different valuations. That is, the appraiser’s race and its interaction with the

owner’s race does not explain the lower minority valuations."

Restricted Access: Real Estate Agent Response to Client Race, Ethnicity, Gender and Side of Market

Andrew Hanson
,
University of Illinois-Chicago
Zackary Hawley
,
Texas Christian University

Abstract

Housing market decisions have far-reaching consequences for consumers including access to employment opportunities and local public goods, wealth accumulation, and neighborhood externalities. Despite large and growing differences between white and minority groups in housing-driven outcomes, and clear findings of racial discrimination by real estate agents in previous studies, there has not been an experimental study examining discrimination by real estate agents in the United States since 2012. We design and implement a correspondence experiment using e-mail communication with real estate agents to test for differences in response across client race, ethnicity, gender, and side of the market (buyer/seller). Real estate agents are more likely to respond to correspondence from white clients than Black or Hispanic clients– whites have a 32.18% higher response rate than Hispanics and an 8.48% higher response rate than Black clients. We also find that real estate agents are more responsive to home-selling clients (23.81% premium over buyers) and female clients (13.57% premium over males).

Testing for Discrimination in Menus

Paul Willen
,
Federal Reserve Bank of Boston
David H. Zhang
,
Harvard Business School

Abstract

We use a new methodology to assess mortgage pricing discrimination by race. First, we show how standard regression-based approaches for assessing differences in the menus of options offered to borrowers can lead to misleading and contradictory results. Second, we introduce a methodology that can detect differences in menus based on relatively weak assumptions. More specifically, we use pairwise dominance relationships in choices that can be supplemented by restrictions on the range of plausible menus to define (1) a test statistic for equality in menus and (2) a difference in menus (DIM) metric. Third, we derive a new procedure for inference on our class of problems. Fourth, we apply our methodology to a novel data set linking 2018--2019 Home Mortgage Disclosure Act (HMDA) data to Optimal Blue rate locks. We find strong evidence for mortgage pricing differentials by race, particularly among Conforming mortgage borrowers who are relatively creditworthy.

Discussant(s)
Stephen L. Ross
,
University of Connecticut
Zhenguo Lin
,
Florida International University
Marco Giacoletti
,
University of Southern California
Francesco D'Acunto
,
Georgetown University
JEL Classifications
  • R2 - Household Analysis