What Explains the Differential Treatment of Renters Based on Ethnicity? New Evidence From Sydney

This article conducts the first contextual analysis of ethnic-based discrimination in an Australian rental housing market: metropolitan Sydney. Logistic regression is employed to investigate how the likelihood of five behaviors by rental agents that may favor Anglo home seekers varies according to characteristics of the agent, home seeker, dwelling, and neighborhood. We find that several forms of discrimination favoring Anglos are consistently more likely in neighborhoods characterized by lower crime rates and shares of renter households, regardless of the ethnicity of the agent. Other patterns are consistent with the hypothesis that, in general in the Sydney rental market, agents regardless of ethnicity are motivated to discriminate by statistical discrimination. Our result that profit, not prejudice, drives discrimination implies that it will prove resilient to unfettered housing market forces and changes in societal ethnic tolerance, but instead, must be addressed through enhanced civil rights enforcement strategies.