ABSTRACT
Higher black entry costs extracted in housing search are only preliminary to racial differences in actual purchase price and a differential rate of equity accumulation. Systematic analyses of the relationship between race and selling price show some variation in trends over the postwar period. Discrimination models compare black/white prices within neighborhoods and test whether price discrimination by sellers and/or market intermediaries imposes a "race tax" or racial premium that blacks must pay to buy into integrated or mostly white neighborhoods. Systematic analysis of the race/price relationship views housing as a composite bundle of attributes including unit size and improvements, location, and neighborhood amenities. The price discrimination theory proposes black markups within neighborhoods when supply shortages induce strong barriers to the transfer of units from white to black occupancy. Extension of the prejuduce model to consider within-neighborhood black discounts shows the apparent purchase-price savings to be illusory.
