An Empirical Analysis of the Cause of Neighborhood Racial Segregation

The perennial debate over the causes of housing segregation between whites and blacks has intensified in recent years, with a greater diversity of opinions than ever before. While suggestive evidence on these causes proliferates, direct evidence connecting competing hypotheses to observed levels of housing segregation is rare due to the unavailability of data. This study provides direct evidence on the causes of housing segregation using new data from the Multi-City Study of Urban Inequality. The central finding is that blacks’ preferences for black neighborhoods and whites’ preferences for white neighborhoods are major causes of housing segregation.