Racial Inequality in America: Neighborhoods versus Households

Chad R. Farrell, University of Alaska at Anchorage
Glenn Firebaugh, Pennsylvania State University

Racial neighborhood inequality (RNI) refers to the degree to which residential environments vary in quality for different race and ethnic groups. This study introduces the index (RNI/RHI)-1, where RNI and RHI (racial household inequality) are both measured by the Gini coefficient, to gauge how much of the observed racial inequality at the neighborhood level arises from noneconomic racial segregation (when income is the only factor that sorts groups into neighborhoods, RNI = RHI as measured by the Gini). We find large positive index values for whites vs. blacks and for whites vs. Hispanics in the 100 largest U.S. metropolitan areas, indicating (1) that racial inequality in these areas is substantially greater at the neighborhood level than at the household level and (2) that factors other than income play a major role in placing minorities in poorer neighborhood environments than those experienced by whites.