Mortgage Lending in Chicago and Los Angeles: A Paired Testing Study of the Pre-Application Process
AbstractThis paper analyzes data from a recently completed study of discrimination against African-American and Hispanic homebuyers when they visit mortgage lending institutions in two major metropolitan markets to make pre-application inquiries. It represents the first application of paired testing to rigorously measure discrimination in the mortgage lending process. The paired tests isolated significant levels of differential treatment on the basis of race and ethnicity in Chicago with African Americans and Hispanics receiving less information and assistance than comparable whites. Adverse treatment of African-Americans and Hispanics is also observed in Los Angeles for specific treatments, but the overall pattern of treatment observed did not differ statistically from equal treatment. Multivariate analyses for Chicago indicate that large lenders treat minorities more favorably than small 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 InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2005-03.
Length: 56 pages
Date of creation: Feb 2005
Date of revision:
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Other versions of this item:
- Ross, Stephen L. & Turner, Margery Austin & Godfrey, Erin & Smith, Robin R., 2008. "Mortgage lending in Chicago and Los Angeles: A paired testing study of the pre-application process," Journal of Urban Economics, Elsevier, vol. 63(3), pages 902-919, May.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-03-06 (All new papers)
- NEP-FIN-2005-03-06 (Finance)
- NEP-GEO-2005-03-06 (Economic Geography)
- NEP-URE-2005-03-06 (Urban & Real Estate Economics)
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