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Lending patterns in poor neighborhoods

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  • Richter, Francisca G.-C.
  • Craig, Ben R.
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    Abstract

    Concentrated poverty has been said to impose a double burden on those that confront it. In addition to an individual's own financial constraints, institutions and social networks of poor neighborhoods can further limit access to quality services and resources for those that live there. This study contributes to the characterization of subprime lending in poor neighborhoods by including a spatial dimension to the analysis, in an attempt to capture social – endogenous and exogenous interaction – effects differences in poor and less poor neighborhoods. The analysis is applied to 2004–2006 census tract level data in Cuyahoga County, home to Cleveland, OH, a region that features urban neighborhoods highly segregated by income and race. The patterns found in poor neighborhoods suggest stronger social effects inducing subprime lending in comparison to less poor neighborhoods.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0167268113000383
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 95 (2013)
    Issue (Month): C ()
    Pages: 197-206

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    Handle: RePEc:eee:jeborg:v:95:y:2013:i:c:p:197-206

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    Web page: http://www.elsevier.com/locate/jebo

    Related research

    Keywords: Subprime lending; Spatial panel; Aggregate data;

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    References

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