Study Reveals Racial Discrimination in Luxembourg Housing Market
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Loading... - Orla Quinn
- 21 Mar 2025
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A recent study conducted by researchers from the Luxembourg Institute of Socio-Economic Research (LISER), the University of Luxembourg, the University of Cambridge, and the Vienna University of Economics and Business has uncovered significant racial discrimination in the Luxembourg housing market. The findings indicate that homeowners with sub-Saharan African surnames are systematically offered lower prices for their properties compared to their counterparts.
The study revealed that sellers with sub-Saharan African-sounding surnames received offers that were, on average, between €18,300 and €21,300 lower than those made to other sellers. The researchers noted, “We detect a systematic appraisal penalty for sellers of sub-Saharan African origin: [all else being equal], our most conservative estimates suggest that these sellers receive offers that are on average 3.1% to 3.6% lower than other sellers.”
Giorgia Menta, a co-author of the study, emphasized the implications of these findings, stating, "Minority homeowners may be unknowingly facing lower offers, which affects their ability to accumulate wealth over time. This type of hidden bias exacerbates the racial wealth gap and has long-term economic consequences."
The study also found that the effects of discrimination were more pronounced among older and less educated participants, highlighting the intersectionality of race and socioeconomic status in the housing market.
These findings are particularly significant for Luxembourg, where nearly half of the population is foreign-born. The study underscores the challenges faced by minority homeowners in a diverse society and raises concerns about equity in the housing market.
The research was part of a broader investigation into racial discrimination in housing markets. The study utilized an experimental design involving an online survey where Luxembourg citizens were asked to evaluate the value of various real estate advertisements. Each advertisement displayed the characteristics of the dwelling along with a randomly assigned seller profile that included names associated with different ethnic backgrounds. This methodology allowed the researchers to isolate the impact of perceived racial identity on property valuation.
The study adds to the growing body of international evidence that racial discrimination in housing markets extends beyond access to homeownership and significantly affects property resale values. The findings call for increased awareness and action to address racial biases in the housing market, ensuring that all homeowners have equal opportunities to achieve fair property valuations and accumulate wealth. As Luxembourg continues to navigate its diverse demographic landscape, addressing these disparities will be crucial for fostering an inclusive and equitable society.
