estimate black-white differences in the probability of ownership, equation (1) can
be expressed as
Note that we have inserted mean values for the variables other than race in equation
(2), in order to gauge black-white difference for otherwise "average" households.
For whites, equation (2) is then evaluated with β8 set equal to zero to give a net
probability of ownership for whites of .750. For blacks, equation (2) is evaluated
with β8 set equal to 1, which gives a net probability of ownership for blacks of .645.
This contrasts with Kain and
Quigley (b) retention of the household composition variables in their "full models" of housing expenditures. However, these
variables have no statistically significant effects on home value in their analyses.
Similarly, if our own models of home value below are expanded to include family
composition, none of the composition measures has any effect on the dependent
To the extent that there is a tendency for undervaluing to increase with
socioeconomic status, the estimated effects of earned family income and head of
household's SEI will be biased downward. The exact size of any such bias is not
particularly important for our analysis, given that we are concerned primarily with
race differences, but Kain and Quigley's evidence suggests that the bias would be
In view of the race-region interaction and the fact that St. Louis is a nonsouthern city, we performed an additional test, to check if the race-income interaction
found in St. Louis holds throughout the non-South. We added a race-income interaction term to the basic model in the first column of Table 3.2
, and estimated this
revised model separately for the South and the non-South. The estimates provided
no evidence for any region-specific race-income interactions.
Quigley (b, 299) calculate that in St. Louis, comparable owner-
occupied dwellings cost 5 to 6 percent more in ghetto than in non-ghetto neighborhoods. They also demonstrate that St. Louis blacks have lower quality housing
than comparable whites. Further research is needed to examine directly the relationship between home value and quality of home for blacks and whites.
Aaron H. 1970. "Income Taxes and Housing." American Economic Review 60:789-806.
Birnbaum H., and
R. Weston. 1974. "Home Ownership and the Wealth Position
of Black and White Americans." Review of Income and Wealth 20:103-18.
Duncan B. 1968. "Trends in Output and Distribution of Schooling." In
W. Moore (eds.), Indicators of Social Change. New York: Russell Sage.
Duncan O. D. a: 1961. "A Socioeconomic Index for all Occupations," and "Properties and Characteristics of the Socioeconomic Index." In
A. J. Reiss (ed.), Occupations and Social Status. New York: Free Press.
-----. b: 1969. "Inheritance of Poverty or Inheritance of Race?" In
(ed.), On Understanding Poverty. New York: Basic Books.