In The Color Factor: The Economics of African-American Well-Being in the Nineteenth-Century South, Howard Bodenhorn investigates the origins, health, and socioeconomic performance of mixed-race people in the antebellum Southern United States. The central conclusion of the book is that mixed-race people fared better than darker-skinned blacks on nearly every dimension; however, they were still disadvantaged relative to whites. This review essay discusses the book's valuable data contributions and relates Bodenhorn's conclusions to the broader literature on colorism. I close with implications for future research on the economics of skin color. (JEL I12, I31, J15, J31, J71, N31)

Residential segregation by race grew sharply during the early twentieth century as black migrants from the South arrived in northern cities. Using newly assembled neighborhood-level data, we provide the first systematic evidence on the impact of prewar population dynamics within cities on the emergence of the American ghetto. Leveraging exogenous changes in neighborhood racial composition, we show that white flight in response to black arrivals was quantitatively large and accelerated between 1900 and 1930. A key implication of our findings is that segregation could have arisen solely from the flight behavior of whites.

This paper studies how the expansion of segregated neighborhoods eroded black wealth in prewar American cities. Using a novel sample of matched addresses, we find that over a single decade rental prices soared by roughly 50% on city blocks that transitioned from all white to majority black. Meanwhile, pioneering black families paid a 28% premium to buy a home on a majority white block, after which their homes lost 10% of their value. These findings strongly suggest that segregated housing markets cost black families much of the gains associated with moving north during the Great Migration.

We construct the first annual market rent and home sales price series for American cities over the twentieth century using 2.7 million newspaper real estate listings. Our findings revise several stylized facts about U.S. housing markets. Real market rents did not fall during the postwar period in most cities and rose nationally by 60% from 1890 to 2006. We also document higher sales price growth between 1953 and 1987 relative to previous series. Real prices reached almost four times their 1890 level by 2006. Prices grew most in metros with high demand and low levels of construction. We find that the rent-to-price ratio fell from about 8% in the early twentieth century to 3% by 2006, consistent with declines in the cost of owning housing relative to renting. For the typical year in our period, the annual return to owning housing was 9%, driven mostly by rental returns of 7.7%, with capital gains contributing only 1.3%. While capital gains were close to zero from 1890 to 1940, they grew to nearly a third of total returns from 1970 to 2006.

We estimate the impact of piped water and sewers on property values in late 19th century Chicago. The cost of sewer construction depends sensitively on imperceptible variation in elevation, and such variation delays water and sewer service to part of the city. This delay provides quasi-random variation for causal estimates. We extrapolate ate estimates from our natural experiment to the area treated with water and sewer service during 1874-1880 using a new estimator. Water and sewer access increases property values by a factor of about 2.8. This suggests that benefits are large relative to: the value of the value of averted mortality, many other infrastructure projects, and construction costs.