Equal Price for Equal Place? Demand-Driven Racial Discrimination in the Housing Market

Anthony Lepinteur
University of Luxembourg

Giorgia Menta
Luxembourg Institute of Socio-Economic Research (LISER)

Sofie R. Waltl
Vienna University of Economics and Business & University of Cambridge

Abstract

Participants to an online study in Luxembourg are presented with fictitious real-estate advertisements and tasked to make an offer for each of them. A random subset is also shown sellers’ names that are strongly framed to signal their origins. Our randomised procedure allows us to conclude that, keeping everything else constant, a seller with a sub-Saharan African surname is systematically offered lower prices. Our most conservative estimates suggest that the average racial appraisal penalty is equal to roughly EUR 20,000. This figure is highly heterogeneous and can amount up to around EUR 58,000. Last, we provide evidence suggesting that this appraisal bias may very well pass through onto the final sales price and that it may be due to statistical discrimination.

JEL Codes: J15, R21, R31.
Keywords: Racial Discrimination, Housing, Randomised Online Experiment.

This research benefits from funding by the FNR Luxembourg National Research Fund, CORE Grant No. 3886 (ASSESS). The study has been pre-registered on the Open Science Framework (OSF) platform (component “Discrimination and the Housing Market”).

Published Paper: Lepinteur, A., Menta, G., & Waltl, S. R. (2025). Equal Price for Equal Place? Demand-Driven Racial Discrimination in the Housing Market. Regional Science and Urban Economics, Vol. 111(March 2025), 104089. https://doi.org/10.1016/j.regsciurbeco.2025.104089

Dissemination

Media Coverage: Paper Jam, RTL, L’essentiel, Delano, Luxembourg Times, Virgule, Radio 100.7

Presentations: [Workshop on Residential Housing Markets: Perceptions and Measurement, Luxembourg][National Bank of Slovakia Research Seminar][The University of Queensland][The University of New South Wales][Doctoral Training Unit (DTU) 3E – Experiments, Ethics and Economics, Luxembourg][36th ESPE Annual Conference][3rd Workshop on Rent Control at DIW Berlin][Conference of the Society for Economic Measurement (SEM), University of Milano-Bicocca][29th European Real Estate Society’s Annual Conference, UCL][American Real Estate & Urban Economics Association (AREUEA) International Conference, University of Cambridge][10th ECINEQ Meeting, Aix-Marseille School of Economics (AMSE)][NOeG conference, University of Salzburg]