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Fed/GFLEC Financial Literacy Seminar Series

December 16, 2021

3:30 PM - 4:30 PM ET

Seminar IV: The Assessment Gap – Racial Inequalities in Property Taxation

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Carlos Fernando Avenancio-León

Assistant Professor of Finance, Rady School of Management, University of California — San Diego



Please note the date of this webinar has changed to December 16.


Bio: Carlos Fernando Avenancio-León

Carlos Fernando Avenancio-León is an assistant professor of finance at the University of California, San Diego. He is an economist whose work focuses on equitable finance, or the role of financial mechanisms in economic redistribution, and its implications for disadvantaged communities and inequality. His broad research interests include Finance, Labor Economics, and Public Finance. His broad legal interests include Empirical Legal Studies and Law of the Political Process. Previously, Avenancio-León was an assistant professor of finance in the Kelley School of Business and an affiliate of the Center for Research on Race and Ethnicity in Society at Indiana University Bloomington. Before that, he was a postdoctoral fellow and research scientist at the Massachusetts Institute of Technology’s Golub Center for Finance and Policy. Avenancio-León received a Ph.D. in finance from the University of California, Berkeley in 2018 and a J.D. from the University of Puerto Rico in 2011.


We document a nationwide “assessment gap” which leads local governments to place a disproportionate fiscal burden on racial and ethnic minorities. We show that holding taxing jurisdictions and property tax rates fixed, black and Hispanic residents face a 10–13% higher tax burden for the same bundle of public services. We decompose this inequality into between- and within- neighborhood components and find just over half of the inequality arises between neighborhoods. We then present evidence on mechanisms. Property assessments are less sensitive to neighborhood attributes than market prices are. This generates spatial variation in tax burden within jurisdiction, and leads to over-taxation of highly minority communities. We also find appeals behavior and appeals outcomes differ by race. Inequality does not arise from either (i) racial differences in transaction prices or (ii) price-regressivity in assessment ratios stemming from location-neutral features of the housing stock.