Under-specified Models and Detection of Discrimination: A Case Study of Mortgage Lending
AbstractThis study examines how omitted variables affect underwriting models the OCC estimates during fair lending examinations. The purpose is to assess the effects of omitted variable bias common to most studies of discrimination in mortgage lending. The results show omitted variables have an important impact on both the estimate of the effect of race and on the identification of outliers for review. Further, there appears to be no consistent patterns to the direction of these impacts. This suggests that it is inappropriate to make generalizations concerning the direction of bias based on assumptions about correlations between omitted variables and race. Copyright Springer Science + Business Media, Inc. 2005
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Bibliographic InfoArticle provided by Springer in its journal The Journal of Real Estate Finance and Economics.
Volume (Year): 31 (2005)
Issue (Month): 1 (August)
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Web page: http://www.springerlink.com/link.asp?id=102945
mortgage lending; discrimination; omitted variable bias;
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- Judith A. Clarke & Nilanjana Roy & Marsha J. Courchane, 2006. "On the Robustness of Racial Disrcimination Findings in Motgage Lending Studies," Econometrics Working Papers 0604, Department of Economics, University of Victoria.
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