Disparities in Pollution Capitalization Rates: The Role of Direct & Systemic Discrimination

Joshua Graff Zivin and Gregor Singer

No 30814, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine how exogenous changes in air pollution exposure over the past two decades have altered disparities in home values between Black and White homeowners. We find that air quality capitalization rates are significantly lower for Black homeowners, so much lower that, despite secular reductions in the Black-White pollution exposure gap, housing value disparities increased. An exploration of mechanisms suggests 60% of this difference is attributable to seller race and 40% to racial neighborhood composition, robust to a range of seller, property and neighborhood characteristics. We discuss our findings through the lens of direct and systemic discrimination in housing markets.

JEL-codes: J15 Q53 R31 (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-ene, nep-env and nep-ure
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