Changes in the white–black house value distribution gap from 1997 to 2005

This paper examines the white–black house value gap across the entire value distribution. Instead of using standard conditional mean analysis and decomposition methods (via OLS regression), we estimate and decompose the changes in the white–black house value gap from 1997 to 2005 using quantile regression. We find that the racial gap in 1997 and 2005 is mostly explained by differences in housing characteristics of white- and black-owned houses but that the variation in the racial gap is explained by racial differences in implicit prices of housing characteristics. Our results show that analysis at the conditional mean masks variations at the tails of the distribution.

► We study the black–white house value gap in 1997 and 2005 using quantile regression. ► Lower valued black-owned houses increased in value faster than white-owned houses. ► Higher valued white-owned houses increased in value faster than black-owned houses. ► These changes were not caused by differences in house characteristics. ► They were caused by differences in the marginal prices of housing characteristics.