Housing Discrimination in Metropolitan America: Findings from the Latest National Paired Testing Study

During the summer and fall of 2000, local fair housing organizations in twenty major metropolitan areas nationwide conducted a total of 4,600 paired tests, directly comparing the treatment that African Americans and Hispanics receive to the treatment that whites receive when they visit real estate or rental offices to inquire about available housing. This study, which was sponsored by the U.S. Department of Housing and Urban Development and conducted by the Urban Institute, provides the most complete and up-to-date information available about the persistence of housing market discrimination against African American and Hispanic homeseekers in large urban areas of the United States today and about the progress we have made in combating discrimination over the last decade.

What Is Known about Testing for Discrimination: Lessons Learned by Comparing across Different Markets

The paper provides a fairly comprehensive examination of recent empirical work on discrimination within economics. The three major analytical approaches considered are traditional regression analysis of outcomes, paired testing or audits, and finally analysis of performance where higher group performance suggests that a group has been treated disfavorably. The review covers research in the labor, credit, and consumption markets, as well as recent studies of discrimination within the legal system. The review suggests that the validity of interpreting observed racial differences as discrimination depends heavily on whether the analysis is based on a sample that is representative of a population of individuals or households or based on a sample of market transactions, as well as the analyst?s ability to control for heterogeneity within that sample. Heterogeneous firm behavior and differentiated products, such as those found in labor and housing markets, also can confound empirical analyses of discrimination by confusing the allocation of individuals across firms or products with disparate treatment or by ignoring disparate impacts that might arise based on that allocation.