Abstract
Recent studies have documented substantially depressed levels of homeownership among African-American households. While prior analyses have focused largely on racial disparities in household financial characteristics, few studies have assessed the potential role of location choice and locational attributes in the homeownership choice decision. This research applies individual-level Census data from the Los Angeles area to explicitly model the residential location and tenure choice decisions of African-American households. Research findings indicate that there is substantial variation across African-American and white households in the determinants of locational choice among South Central LA, other parts of Los Angeles, and Inland Empire (San Bernardino County) areas. In addition, African-American and white households are found to differ in how location characteristics impact in their tenure choices. Overall, after accounting for location, the empirical analysis served to explain three-fourths of the 23 percentage point gap in homeownership rates between Los Angeles white and black households, whereas models that lack controls for location accounted only for about one-half of the observed gap.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Alba, R., and J. Logan. (1993). “Minority Proximity to Whites in Suburbs: An Individual-level Analysis of Segregation,” American Journal of Sociology 98(6), 1388–1427.
Apgar, W., and H. Pollakowski. (1986). “Housing, Mobility, and Choice,” Working Paper W86–6, Joint Center for Housing Studies, Harvard University, Cambridge.
Blomquist, G., M. Berger, and J. Hoehn. (1988). “New Estimates of the Quality of Life in Urban Areas,” American Economic Review 78, 89–107.
Charles, K., and E. Hurst. (2002). “The Transition to Home Ownership and the Black-White Wealth Gap,” Review of Economics and Statistics 84(2), 281–297.
Coulson, E. (1999). “Why are Hispanic-and Asian-American Homeownership Rates So Low? Immigration and Other Factors,” Journal of Urban Economics 45, 209–227.
Darden, J. T., and S. M. Kamel. (2000). “Black residential segregation in the city and suburbs of Detroit: Does Socioeconomic Status Matter?” Journal of Urban Affairs 22(1), 1–13.
Deng, Y., S. Ross, and S. Wachter. (1999). “Employment Access, Residential Location and Homeownership,” Wharton Real Estate Workpaper Series #320, Zell/Lurie Real Estate Center at Wharton, University of Pennsylvania.
Evans, W., W. Oates, and R. Schwab. (1992). “Measuring Peer Group Effects: A Study of Teenage Behavior,” Journal of Political Economy 100(5), 966–991.
Farley, R. (1995). “Race Still Matters: The Minimal Role of Income and Housing Cost as Causes of Housing Segregation in St. Louis, 1990,” Urban Affairs Review 31(2), 244–254.
Gabriel, S., and S. Rosenthal. (1989). “Household Location and Race: Estimates of a Multinomial Logit Model,” The Review of Economics and Statistics 71(2), 240–249.
Gabriel, S., J. Mattey, and W. Wascher. (2001). “Compensating Differentials and Evolution in the Quality of Life Among U.S. States,” Regional Science and Urban Economics. Forthcoming.
Galster, G. C., R. G. Quercia, and A. Cortes. (2000). “Identifying Neighborhood Thresholds: An Empirical Exploration,” Housing Policy Debate 11(3), 701–732.
Glaeser, E., B. Sacerdote, and J. Scheinkman. (1996). “Crime and Social Interactions,” Quarterly Journal of Economics 111(2), 507–548.
Goodman, A. C., and M. Kawai. (1982), “Permanent Income, Hedonic Prices and Demand for Housing: New Evidence,” Journal of Urban Economics 12, 214–37.
Gyourko, J., and J. Tracy. (1992). “The Structure of Local Public Finance and the Quality of Life,” Journal of Political Economy 99(4), 774–806.
Gyourko, J., and P. Linneman. (1996). “An analysis of the changing influences on traditional household ownership patterns,” Journal of Urban Economics 39, 318–341.
Gyourko, J. P. Linneman, and S. Wachter. (1999). “Analyzing the Relationships among Race, Wealth, and Home Ownership in America,” Journal of Housing Economics 8, 63–89.
Jargowsky, P. (1997). Poverty and Place. New York: Russell Sage Foundation.
Jencks, C., and P. E. Peterson (eds). (1991). The Urban Underclass. Washington, D.C.: Brookings Institution.
Katz, L. F., J. R. Kling, and J. R. Liebman. (2000). “A Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment,” Princeton University Industrial Relations Working Paper #441.
Levine, D. I., and G. Painter. (2001). “How Much of School Effects is Just Sorting? Identifying Causality in the National Education Longitudinal Survey,” University of Southern California Working Paper. [http://www-ref.usc.edu/~gpainter/schools.pdf]
Ludwig, J., G. J. Duncan, and Joshua C. Pinkston. (2000). “A Neighborhood Effects on Economic Self-Sufficiency: Evidence from a Randomized Housing-Mobility Experiment,” @ JCPR Working Paper 159. [http://www.jcpr.org/wp/WPprofile.cfm?ID=1.65]
Ludwig, J., G. J. Duncan, and P. Hirschfield. (1999). “Urban Poverty and Juvenile Crime: Evidence from a Randomized Housing-Mobility Experiment,” Working Paper, Northwestern University/University of Chicago Joint Center for Poverty Research.
Massey, D. S., and N. A. Denton. (1993). American Apartheid: Segregation and the Making of the Underclass. Cambridge, MA: Harvard University Press.
Newman, S., and J. Harkness. (2002). “The Long-Term Effects of Housing Assistance on Self-Sufficiency,” Journal of Policy Analysis and Management 21(1), 21–43.
Painter, G., S. Gabriel, and D. Myers. (2001). “Race, Immigrant Status, and Housing Tenure Choice,” Journal of Urban Economics 49, 150–167.
Painter, G. (2000). “Tenure Choice with Sample Selection: A Note on the Differences among Alternative Samples,” Journal of Housing Economics 9(3), 197–213.
Pollakowski, H., and J. Edwards. (1987). “Life-Cycle, Class, City Vintage, and the Probability of Suburbanization,” Working Paper W87–4, Joint Center for Housing Studies, Harvard University, 1987.
Rosenbaum, J. E. (1995). “Changing the Geography of Opportunity by Expanding Residential Choice: Lessons from the Gatreaux Program,” Housing Policy Debate 6(1), 231–269.
Wachter, S., and I. Megbolugbe. (1992). “Racial and Ethnic Disparities in Homeownership,” Housing Policy Debate 3, 333–370.
Wilson, W. J. (1987). The Truly Disadvantaged. Chicago: University of Chicago Press.
Wilson, W. J. (1996). When Work Disappears. New York: Knopf.
Yinger, J. (1986). “Measuring Racial Discrimination with Fair Housing Audits: Caught in the Act,” American Economic Review 76, 881–893.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Gabriel, S., Painter, G. Pathways to Homeownership: An Analysis of the Residential Location and Homeownership Choices of Black Households in Los Angeles. The Journal of Real Estate Finance and Economics 27, 87–109 (2003). https://doi.org/10.1023/A:1023611513835
Issue Date:
DOI: https://doi.org/10.1023/A:1023611513835