Credit Card Redlining
AbstractThis paper evaluates the presence of racial disparities in the issuance of consumer credit. Using a database of credit histories, I link location-based information on race with individual credit files. After controlling for place-specific factors such as housing vacancy rates and general population demographics, I find qualitatively large differences in the amount of credit offered to similarly qualified applicants living in black versus white areas. High data quality allows distinguishing between issuer-provision (supply) and utilization of credit (demand). Additional estimates using information on payday lending provide support for idea that issuers condition lending on location. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Review of Economics and Statistics.
Volume (Year): 93 (2011)
Issue (Month): 2 (May)
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- John Gathergood, .
"Racial Disparities in Credit Constraints in the Great Recession: Evidence from the UK,"
Discussion Papers, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)
11/09, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
- Gathergood John, 2011. "Racial Disparities in Credit Constraints in the Great Recession: Evidence from the UK," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 11(1), pages 1-32, September.
- Cohen-Cole, Ethan & Duygan-Bump, Burcu & Montoriol-Garriga, Judit, 2013. "Who gets credit after bankruptcy and why? An information channel," Journal of Banking & Finance, Elsevier, Elsevier, vol. 37(12), pages 5101-5117.
- Fourcade, Marion & Healy, Kieran, 2013. "Classification situations: Life-chances in the neoliberal era," Accounting, Organizations and Society, Elsevier, vol. 38(8), pages 559-572.
- Chatterji, Aaron K. & Seamans, Robert C., 2012. "Entrepreneurial finance, credit cards, and race," Journal of Financial Economics, Elsevier, Elsevier, vol. 106(1), pages 182-195.
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