Housing and inequality

Yannis M Ioannides and L. Rachel Ngai

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We approach the literature on housing and inequality from two angles. One is the impact of unequal endowments on housing. The second is the “memberships” inequality associated with neighborhoods, namely, households’ location in a geographic and social context. We elaborate on these two angles of inequality and focus on three distinctive features of housing: consumption, capital, and location. For owner-occupants, capital and consumption are bundled together in a single good. For both renters and owner-occupants, housing consumption inequality, access to good neighborhoods, and housing wealth follow from unequal endowments. Housing can propagate inequality by enabling owner-occupants to use it as collateral for other investments or to secure higher returns to human capital investments through the better schools in better neighborhoods. We use this approach to analyze key aspects of housing and inequality, paying special attention to the impacts of racial discrimination and segregation.

JEL-codes: J1 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2025-09-08
New Economics Papers: this item is included in nep-mac
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Published in Journal of Economic Literature, 8, September, 2025, 63(3), pp. 916 - 963. ISSN: 0022-0515

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