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Mortgage lending in Chicago and Los Angeles: A paired testing study of the pre-application process

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Author Info

  • Ross, Stephen L.
  • Turner, Margery Austin
  • Godfrey, Erin
  • Smith, Robin R.

Abstract

In 2000, the Urban Institute paired African-American and Hispanic testers with whites and sent the pairs to visit lenders in Chicago and Los Angeles, in order to inquire about information on obtaining a home mortgage. In Chicago, African Americans and Hispanics systematically received less information and assistance than comparable whites; while in Los Angeles, the treatment of minority and white testers did not differ statistically from each other. Multivariate analyses for Chicago indicate that large lenders treat minorities more favorably than smaller lenders and that lenders with substantial numbers of applications from African-Americans treat African-Americans more favorably than lenders with predominantly white application pools.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 63 (2008)
Issue (Month): 3 (May)
Pages: 902-919

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Handle: RePEc:eee:juecon:v:63:y:2008:i:3:p:902-919

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Mortgage lending Discrimination Paired testing Fair lending;

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References

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  1. Peter Linneman & Susan Wachter, 1989. "The Impacts of Borrowing Constraints on Homeownership," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(4), pages 389-402.
  2. Mitchell Stengel & Dennis Glennon, 1999. "Evaluating Statistical Models of Mortgage Lending Discrimination: A Bank-Specific Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 299-334.
  3. FLACHAIRE, Emmanuel, 1999. "A better way to bootstrap pairs," CORE Discussion Papers 1999024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Charles W. Calomiris & Charles M. Kahn & Stanley D. Longhofer, 1994. "Housing-finance intervention and private incentives: helping minorities and the poor," Proceedings, Federal Reserve Bank of Cleveland, pages 634-678.
  5. Flachaire, Emmanuel, 2005. "Bootstrapping heteroskedastic regression models: wild bootstrap vs. pairs bootstrap," Computational Statistics & Data Analysis, Elsevier, vol. 49(2), pages 361-376, April.
  6. Alicia H. Munnell, 1992. "Mortgage lending in Boston: interpreting HMDA data," Working Papers 92-7, Federal Reserve Bank of Boston.
  7. Gwartney, James & Haworth, Charles, 1974. "Employer Costs and Discrimination: The Case of Baseball," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 873-81, July/Aug..
  8. Stephen Ross, 2002. "Paired Testing and the 2000 Housing Discrimination Study," Working papers 2002-15, University of Connecticut, Department of Economics.
  9. Neumark, David, 1996. "Sex Discrimination in Restaurant Hiring: An Audit Study," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 915-41, August.
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  12. Raphael Bostic, 2003. "A Test of Cultural Affinity in Home Mortgage Lending," Journal of Financial Services Research, Springer, vol. 23(2), pages 89-112, April.
  13. Harry J. Holzer & Keith R. Ihlanfeldt, 1998. "Customer Discrimination And Employment Outcomes For Minority Workers," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 835-867, August.
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  15. repec:fth:louvco:9924 is not listed on IDEAS
  16. Cornell, Bradford & Welch, Ivo, 1996. "Culture, Information, and Screening Discrimination," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 542-71, June.
  17. Jan Ondrich & Stephen Ross & John Yinger, 2001. "Now You See it, Now You Don't: Why Do Real Estate Agents Withhold Available Houses from Black Customers?," Working papers 2001-01, University of Connecticut, Department of Economics, revised Aug 2002.
  18. David Horne, 1997. "Mortgage Lending, Race, and Model Specification," Journal of Financial Services Research, Springer, vol. 11(1), pages 43-68, February.
  19. Stephen L. Ross & John Yinger, 2002. "The Color of Credit: Mortgage Discrimination, Research Methodology, and Fair-Lending Enforcement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262182289, December.
  20. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
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Citations

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Cited by:
  1. John Yinger, 2009. "Hedonic Markets and Explicit Demands: Bid-Function Envelopes for Public Services, Neighborhood Amenities, and Commuting Costs," Center for Policy Research Working Papers 114, Center for Policy Research, Maxwell School, Syracuse University.
  2. Robert Bifulco & Jason M. Fletcher & Stephen L. Ross, 2009. "The Effect of Classmate Characteristics on Individual Outcomes: Evidence from the Add Health," Working papers 2009-15, University of Connecticut, Department of Economics.
  3. Robert Bifulco & Jason M. Fletcher & Stephen L. Ross, 2011. "The Effect of Classmate Characteristics on Post-secondary Outcomes: Evidence from the Add Health," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 25-53, February.
  4. Stephen L. Ross, 2005. "The Continuing Practice and Impact of Discrimination," Working papers 2005-19, University of Connecticut, Department of Economics, revised Jul 2006.
  5. Carlsson, Magnus & Eriksson, Stefan, 2014. "Discrimination in the rental market for apartments," Journal of Housing Economics, Elsevier, vol. 23(C), pages 41-54.
  6. Billings, Stephen B. & Johnson, Erik B., 2012. "A non-parametric test for industrial specialization," Journal of Urban Economics, Elsevier, vol. 71(3), pages 312-331.
  7. Sara DeLoughy, 2012. "Risk versus Demographics in Subprime Mortgage Lending: Evidence from Three Connecticut Cities," The Journal of Real Estate Finance and Economics, Springer, vol. 45(3), pages 569-587, October.

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