Abstract
Using data from the 2019 Survey of Consumer Finances and the 2013 to 2017 Panel Study of Income Dynamics, I explore the racial wealth gap between white, Black, Hispanic or Latino, and Asian households in the United States. To examine the wealth disparities between these different racial groups, I focus on multiple factors including differences in income, homeownership, private intergenerational transfers, and financial investments. My thesis consists of four different regression models, which include ordinary least squares (OLS), weighted least squares, time fixed effects, and state fixed effects. The OLS results suggest Black households, on average, hold $588,690 less net wealth than white households and Hispanic or Latino households hold $15,190 less, after control variables are added to the regression. When transforming net wealth using an inverse hyperbolic sine transformation, I find that Black households hold 173 percent less net wealth than white households. In addition, after separating net wealth into quartiles, the racial wealth gap continues to be persistent at all quartiles. Overall, the large and statistically significant results indicate that a wealth gap is present between white and non-white households, and these results can be partially explained by financial risk taking, homeownership, education, and income variables.