Where does racial discrimination occur? An experimental analysis across neighborhood and housing unit characteristics

•Racial discrimination examined across neighborhood and housing unit characteristics•Characteristics are racial composition, rent, distance to urban core, vacancy rate.•Local linear smoothing technique used to find where discrimination occurs•Results back current/future customer prejudice and perceived preference hypotheses.•No support for the landlord taste-based hypothesis

This paper examines racial discrimination across several neighborhood and housing unit characteristics including racial composition, rent, and distance from the urban core. We find that African Americans face higher rates of discrimination than whites in a wide range of racially mixed neighborhoods, in higher rent areas, closer to central cities, and in low vacancy areas. These results are robust to various parameterizations of the local smoothing empirical specification and within a multivariate nonlinear parametric estimation technique. The location of discrimination supports the current/future customer prejudice and perceived preference hypotheses as a cause of discrimination in housing markets but not the landlord taste-based hypothesis.