MEASURING RACIAL DISCRIMINATION WITH FAIR HOUSING AUDITS: CAUGHT IN THE ACT

A survey technique called a fair housing provides a direct measure of racial discrimination in housing. This paper examines the econometric issues raised by audit data, measures the discrimination uncovered by a 1981 Boston study, and tests hypotheses about the causes of discrimination. The estimated level of discrimination is high: Black housing seekers are told about 30 percent fewer available housing units than are whites. The hypothesis tests indicate that the primary cause of this discrimination is that housing agents illegally promote their economic interests by catering to the racial prejudice of their current or potential white customers.