Service Quality and Unfair Racial Discrimination in Homeowners Insurance

Using complaints as a measure of quality, the quality of homeowners insurance policies offered to high versus low minority areas is compared. The results indicate that homeowners insurance policies offered to high minority areas have a lower quality than policies offered to low minority areas. One should, however, be aware that estimation bias due to omitted variables and measurement errors is always a possibility in empirical works relying on natural experiments like this one.