The land prices of the former outcaste neighbourhoods in Japan remain substantially lower, suggesting persistent stigma despite the legal abolition of discrimination more than a century ago.

Historically, many societies maintained formal institutional rules that discriminated against minority groups. Although *de jure *discrimination against minorities has been abolished in many contexts, *de facto *discrimination may persist long after these formal institutions have been abolished (Yinger 1986, Bertrand and Mullainathan 2004, Christensen and Timmins 2023). Understanding the persistence of discrimination is thus essential for addressing the long shadow of discriminatory institutions over minority groups. However, empirically identifying the persistence of discrimination has been difficult for various reasons, such as limited data availability in historical contexts and the lack of exogenous variation in minority group affiliation (Sen and Wasow 2016).

100 years of the land price discount of the former outcaste neighbourhoods

In new work (Yamagishi and Sato 2025), we explore the century-long persistence of buraku discrimination in Japan. Buraku discrimination stems from discrimination against the buraku class, which engaged in stigmatised jobs related to death, such as butchering and leather crafting. They were stigmatised because killing animals is considered sinful in Buddhism and Shintoism. During the samurai period, people in this ‘outcaste’ group were forced to live in certain areas (known as burakuareas). Although the Meiji Restoration in 1871 liberated the former outcaste groups, granting them equal treatment under the law, the discriminatory mindset towards the buraku class remained, as did the stigma attached to buraku areas.

We first document a significant land price discount in buraku areas, even compared to nearby non-buraku locations. These areas are typically small and scattered across the city, as illustrated in Figure 1. Using newly digitised land price data on Kyoto over the past 100 years, we document the evolution of the land price discount (Figure 2). We find that in 1912 –40 years after the liberation edict – land prices in buraku areas were 53% lower. Even in 2018, 150 years post-liberation, buraku areas had approximately 14% lower land prices. Although the land price discount has narrowed substantially, it still persists today despite extensive efforts and policies to eliminate buraku discrimination.

Figure 1: Illustration of how buraku areas are located in a city

Figure 2: Time series of the land price discount of buraku areas

Note: The orange dots represent the point estimates of the buraku price penalty in the border design with the linear specification of the buraku dummy. Estimates for 1961–2015 were obtained in the same way. The vertical bars represent the corresponding 95% confidence intervals. All numbers are rounded to the nearest integers.

Interpreting the buraku land price discount: Capitalisation of discrimination risk

What drives the land price discount in buraku areas? We argue that the elevated risk of experiencing discrimination by living in buraku areas is a key mechanism. The 1871 liberation edict formally abolished the discriminated class, leaving no formal definition of it thereafter. Discrimination thus requires inferring who is associated with the former buraku class. However, this is not a trivial task in Japan, as the discriminated group lacks clearly visible characteristics such as skin colour, surname, or language. The invisibility of the discriminated group is a defining feature of buraku discrimination, famously reflected in the title of the book Japan’s Invisible Race by De Vos and Wagatsuma (1966). Living in a buraku area thus serves as the primary signal for identifying targets of discrimination. Consistent with this, a 2005 survey conducted in Osaka Prefecture asked respondents how they identify buraku people, to which two-thirds of respondents replied “by current residence” (Okuda 2007).

We argue that, in this context, the severity of buraku discrimination is reflected in land prices; that is, the buraku land price discount serves as a quantitative measure of its severity. The logic follows from a standard spatial equilibrium model: while people face a higher risk of discrimination in buraku areas, they are still willing to accept it if housing is less expensive. In spatial equilibrium, in which nobody has an incentive to move, the housing cost discount should exactly offset the cost of facing more discrimination. Therefore, measuring housing costs as land prices, the land price discount provides a novel quantitative measure of the cost associated with elevated discrimination risk.

In contrast, we find at most limited evidence for alternative mechanisms that could account for the persistent buraku land price discount. These include adverse neighbourhood conditions associated with poverty, differences in school quality, durable local capital (e.g. housing stock quality or public goods), locational characteristics such as natural conditions, social aversion towards interaction with people of outcaste ancestry, and policy discontinuities at the borders of buraku areas. We thus conclude that the elevated risk of buraku discrimination is the main driver of the persistent land price discount in buraku areas.

Lessons from buraku discrimination: The ‘last mile problem’ in discrimination

We show that discrimination has persisted for over 150 years since the liberation of the outcaste buraku class, despite having minimal ethnic and cultural differences. The evolution of land prices indicates that the buraku land price discount has narrowed substantially, likely reflecting broad anti-discrimination efforts that have improved living conditions in buraku areas and reduced tolerance for buraku discrimination.

Yet, the ‘last mile’ – the complete elimination of discrimination – remains unachieved. Similar patterns appear elsewhere: in the US, for instance, the civil rights movement and subsequent reforms substantially reduced racial discrimination, but evidence shows it persists.

Our analysis suggests that this ‘last mile problem’ is particularly difficult to overcome, even when minorities differ little from the majority. Addressing this issue may require broader or more fundamental approaches.

References

Bertrand, M, and S Mullainathan (2004), “Are Emily and Greg more employable than Lakisha and Jamal? A field experiment on labor market discrimination,” American Economic Review 94(4): 991–1013.

Christensen, P, and C Timmins (2023), “The damages and distortions from discrimination in the rental housing market,” Quarterly Journal of Economics 138(3): 2505–2557.

De Vos, G, and H Wagatsuma (1966), Japan’s Invisible Race: Caste in Culture and Personality, University of California Press.

Okuda, H (2007), Minasareru Sabetsu Naze Buraku wo Sakeru noka (Discrimination as Avoiding Being Regarded as Buraku: Why Do People Avoid Buraku), Buraku Liberation Publishing.

Sen, M, and O Wasow (2016), “Race as a bundle of sticks: Designs that estimate effects of seemingly immutable characteristics,” Annual Review of Political Science 19: 499–522.

Yamagishi, A, and Y Sato (2025), “Persistent stigma in space: 100 years of Japan’s invisible race and their neighborhoods,” The Review of Economics and Statistics: 1–46.

Yinger, J (1986), “Measuring racial discrimination with fair housing audits: Caught in the act,” American Economic Review 76(5): 881–893.