Discrimination Against Puerto Ricans in the Puerto Rican Housing Market: Evidence From a Preregistered Audit Experiment

Abstract Do locals discriminate against themselves by favoring foreigners with higher expected purchasing power? Drawing on theories of prejudice, discrimination, and colonialism, I argue that in colonized and post-colonial countries, local home sellers discriminate against local potential homebuyers while favoring foreigners with expected higher purchasing power, anticipating a more profitable transaction. I support this argument with evidence from a preregistered online audit study targeting discriminatory attitudes toward local home buyers. In the study, fictitious home buyers with distinctive language and ethnic names emailed 1,512 home sellers (realtors and homeowners) across all municipalities in Puerto Rico. Home sellers reported more houses available to Americans and invited them to more house showings than Puerto Ricans. My estimates indicate that ethnic discrimination exists in the Puerto Rican housing market. These findings provide new insights into ethnic dynamics in colonized and post-colonial societies and underscore concerns about recent legislation that turned Puerto Rico into a tax haven.