Equilibrium models posit that, since whites have a taste for discrimination, they will outbid blacks for housing in racially homogeneous neighborhoods. Contrary observations that blacks pay more are often attributed to the price pressures that result from rapid expansion of the black population. This paper uses hedonic value assessment techniques to estimate racially based price differentials in a market where the black population has been stable for a long period. Explicit tests are made for boundary effects and market segmentation. The results indicate that blacks pay a discriminatory premium for housing, that results from collusive-like behavior that limits their housing opportunities.
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