Racial Segregation in Housing Markets and the Erosion of Black Wealth

Prottoy Akbar, Sijie Li, Allison Shertzer and Randall Walsh

No 25805, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Housing is the most important asset for the vast majority of American households and a key driver of racial disparities in wealth. This paper studies how residential segregation by race eroded black wealth in prewar urban areas. Using a novel sample of matched addresses from prewar American cities, we find that over a single decade rental prices soared by roughly 50 percent on city blocks that transitioned from all white to majority black. Meanwhile, pioneering black families paid a 28 percent premium to buy a home on a majority white block. These homes then lost 10 percent of their original value as the block became majority black. These findings strongly suggest that segregated housing markets cost black families much of the gains associated with migrating to the North.

JEL-codes: J15 N12 R31 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-his
Note: DAE
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Citations: View citations in EconPapers (15)

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Journal Article: Racial Segregation in Housing Markets and the Erosion of Black Wealth (2025)
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