Credit card redlining revisited
AbstractUsing a proprietary dataset of credit bureau records, Cohen-Cole (2008) finds that banks set credit limits on revolving accounts based in part on the racial composition of the neighborhood in which each borrower resides. This paper evaluates the evidence presented in that working paper using the same proprietary database of credit bureau records. The replication effort presented in this paper suggests that decisions about how to calculate the variables used in that study may have resulted in the unnecessary exclusion of one-fifth of available observations from the estimation samples and may have increased the size of the reported effect by over 25 percent. Furthermore, this analysis suggests that when a control for neighborhood income is added to the estimations, the results presented as evidence of redlining activities disappear.
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Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2009-39.
Date of creation: 2009
Date of revision:
Other versions of this item:
- NEP-ALL-2009-11-21 (All new papers)
- NEP-BAN-2009-11-21 (Banking)
- NEP-URE-2009-11-21 (Urban & Real Estate Economics)
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- John Gathergood, .
"Racial Disparities in Credit Constraints in the Great Recession: Evidence from the UK,"
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, vol. 11(1), pages 1-32, September.
- Song Han & Benjamin J. Keys & Geng Li, 2011. "Credit supply to personal bankruptcy filers: evidence from credit card mailings," Finance and Economics Discussion Series 2011-29, Board of Governors of the Federal Reserve System (U.S.).
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