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Ethnic discrimination in the Greek housing market

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Abstract

This study employs a field experiment to assess the degree of discrimination against female Albanians in Greek housing markets. We divide rental housing into three categories by rent and designate the different levels of rent as working, middle, and upper classes. Albanians are significantly less likely to be asked to visit advertised rental housing in all the three categories, while rental penalties for Albanians are also significant. Interestingly, more discrimination was observed with higher-status rental properties. The outcomes suggest that the existence of isolated and racially segregated housing may be a result of prejudice and/or negative stereotypes against Albanians.

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Notes

  1. Housing discrimination occurs when home seekers are less likely to succeed in an uncertain transaction or have less access to housing resources (Dymski 2005). Housing discrimination also occurs whenever a home seeker can complete a transaction only at higher cost or on more stringent terms than other seekers with the same characteristics.

  2. An ethnic group is a group of humans whose members identify with each other through a common heritage: cultural, linguistic, religious, and behavioral traits that are real or presumed. On the other hand, the term racial group usually refers to the categorization of humans into groups on the basis of various sets of heritable characteristics (skin color, cranial or facial features, and hair textures). However, ethnicity and race are seen as two aspects of the same thing.

  3. Decomposition does not allow one to test for discrimination directly. If some omitted variables correlate with ethnicity, the unexplained residual in fact captures not only discrimination but also unobserved group differences. For example, discrimination may be conflated with other factors when neighborhood variables, such as the quality of the surrounding housing, are excluded from regression analysis (Yinger 1998).

  4. Out of those who applied for legalization in 1999, 65% come from Albania and a further 18% come from Bulgaria, Romania, Ukraine, Poland, and Georgia (Lyberaki and Maroukis 2005). In 2001, the estimated stock of foreigners living legally in Greece was 762,200, amounting to approximately 7% of the total population. Ten years earlier, their share was a modest 1.6% of the population (OECD 2005).

  5. Following Fix and Struyk (1992), the most common way to measure the overall incidence of discrimination is to count the number of times a minority home seeker is treated less favorably than the majority applicant with regards to a single type of landlord behavior and then to subtract the number of times the majority applicant is treated less favorably; all of this is presumably based mainly on random incidents. The result is a net measure of the number of acts of discrimination a minority applicant can expect to encounter during each application to a landlord.

  6. For instance, if a realtor assesses a minority candidate as being attractive and decides, on this basis, to rent to that candidate instead of to a less attractive native-born candidate, discrimination has occurred.

  7. In field tests conducted in the UK (Daniel 1968; Jowell and Prescott-Clarke 1970; McIntosh and Smith 1974; Hubbuck and Carter 1980; Brown and Gay 1985); the International Labour Office (Bovenkerk et al. 1979; Bovenkerk et al. 1995; Bovenkerk 1992); Atlanta (Levinon 1975); San Francisco (Nunes and Seligman 2000); Washington, DC (Bendick et al. 1999); and Australia (Henry and Ginzderg 1985), the minority always initiates the first contact.

  8. Notice that since eight pairs of testers were used in this study, a test of homogeneity across pairs was undertaken to check whether or not one or more pairs of testers were driving the results. Eventually, we accept the null hypothesis of homogeneity at the 1% level. This implies the success of efforts to control for participants’ effects that might have biased the access availability and rent outcomes.

  9. A regression analysis confirmed the initial descriptive statistics. The estimated probability of Albanian seekers receiving an appointment in the working-class areas was lower by 30.1 percentage points than that for Greeks; in the middle-class areas, 39.9 percentage points; and in the upper-class areas, 51.1 percentage points. All estimations are statistically significant at the 1% level. To continue with rent estimations, in the working-class areas, the negative effect of Albanians’ ethnic background was 2.4%; in the middle-class areas, 2.7%; and in the upper-class areas, 4.4%. All rent estimations are statistically significant at the 1% level. Analytical results with control variables, fixed effects, and sensitivity analysis are available by the authors upon request.

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Acknowledgements

I acknowledge the assistance from three anonymous referees and the editor, Professor Klaus F. Zimmermann, whose comments and suggestions have significantly contributed to the improvement of previous versions of this manuscript.

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Authors and Affiliations

  1. Department of Economics, University of Piraeus, 80 Karaoli and Dimitriou Street, 18534, Piraeus, Greece

    Nick Drydakis

  2. Department of Accounting and Finance, Athens University of Economics and Business, 76 Patision Street, 104 34, Athens, Greece

    Nick Drydakis

  3. Scientific Centre for the Study of Discrimination, ′Iσoν, Athens, Greece

    Nick Drydakis

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Correspondence to Nick Drydakis.

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Responsible editor: Klaus F. Zimmermann

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Drydakis, N. Ethnic discrimination in the Greek housing market. J Popul Econ 24, 1235–1255 (2011). https://doi.org/10.1007/s00148-010-0313-0

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  • DOI: https://doi.org/10.1007/s00148-010-0313-0

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