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Measuring Applicant Quality to Detect Discrimination In Peer-to-Peer Lending

Author

Listed:
  • Weizsäcker, Georg

    (Humboldt University Berlin and DIW Berlin)

  • Zankiewicz, Christian

    (DIW Berlin)

Abstract

We measure the quality of applications for online peer-to-peer lending in Germany and relate it to gender discrimination. The data context allows summarizing application quality as a single numeric measure, the expected internal rate of return. The measure serves as a control variable and is interacted with the applicants\' gender. We find that women enjoy higher funding rates than men, mainly because they are less punished when they offer a low application quality. The evidence is consistent with the hypothesis that the predominantly male lenders have a less precise understanding of women\'s applications than of men\'s applications.

Suggested Citation

  • Weizsäcker, Georg & Zankiewicz, Christian, 2017. "Measuring Applicant Quality to Detect Discrimination In Peer-to-Peer Lending," Rationality and Competition Discussion Paper Series 13, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:13
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    More about this item

    Keywords

    Gender discrimination; household finance; irrational beliefs;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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