Credit Access, the Costs of Credit and Credit Market Discrimination
AbstractSince the early 1990s, credit expanded relative to income, especially after 2001. It is hypothesized that traditionally uneven credit access and gaps in the costs of credit by demographic characteristics shrank during this period. Relying on data from the Federal Reserve’s Survey of Consumer Finance, this study looks at financial constraints, the costs of credit and a number of contributions to the costs of credit, including sources and types of loans. The results indicate that taste-based discrimination and structural discrimination may have persisted and possibly increased over time. Gaps in credit access and costs of credit have widened by race, remained high by income, but shrank by ethnicity. Part of the overall differences in credit access was a varying reliance on professional information when making decisions on debt.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp171.
Date of creation: 2008
Date of revision:
Household credit; bank credit; loan denials; discrimination; debt payments; interest rates;
Other versions of this item:
- Christian Weller, 2009. "Credit Access, the Costs of Credit and Credit Market Discrimination," The Review of Black Political Economy, Springer, vol. 36(1), pages 7-28, March.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tripp, James D & Smith, Stanley D, 1993. "U.S. Credit Union Motivation for Involvement in the First-Mortgage Market," The Journal of Real Estate Finance and Economics, Springer, vol. 7(3), pages 229-36, November.
- Robert Avery & Katherine Samolyk, 2004. "Bank Consolidation and Small Business Lending: The Role of Community Banks," Journal of Financial Services Research, Springer, vol. 25(2), pages 291-325, April.
- James H. Rauch & Jill M. Hendrickson, 2004. "Does Bank Consolidation Hurt the Small Business Borrower?," Small Business Economics, Springer, vol. 23(3), pages 219-226, October.
- Munnell, Alicia H. & Geoffrey M. B. Tootell & Lynn E. Browne & James McEneaney, 1996.
"Mortgage Lending in Boston: Interpreting HMDA Data,"
American Economic Review,
American Economic Association, vol. 86(1), pages 25-53, March.
- Alicia H. Munnell, 1992. "Mortgage lending in Boston: interpreting HMDA data," Working Papers 92-7, Federal Reserve Bank of Boston.
- Cavalluzzo, Ken S & Cavalluzzo, Linda C, 1998. "Market Structure and Discrimination: The Case of Small Businesses," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(4), pages 771-92, November.
- Christian Weller & Derek Douglas, 2007. "One Nation Under Debt," Challenge, M.E. Sharpe, Inc., vol. 50(1), pages 54-75, February.
- Scott E. Hein & Timothy W. Koch & S. Scott MacDonald, 2005. "On the uniqueness of community banks," Economic Review, Federal Reserve Bank of Atlanta, issue Q 1, pages 15-36.
- Wheelock, David C. & Wilson, Paul W., 2004.
"Consolidation in US banking: Which banks engage in mergers?,"
Review of Financial Economics,
Elsevier, vol. 13(1-2), pages 7-39.
- David C. Wheelock & Paul Wilson, 2002. "Consolidation in US banking: which banks engage in mergers?," Working Papers 2001-003, Federal Reserve Bank of St. Louis.
- Kenneth A. Carow & Edward J. Kane & Rajesh P. Narayanan, 2005.
"How have borrowers fared in banking mega-mergers?,"
Working Paper Series
2005-09, Federal Reserve Bank of San Francisco.
- Aigbe Akhigbe & Jeff Madura & Ann Whyte, 2004. "Partial Anticipation and the Gains to Bank Merger Targets," Journal of Financial Services Research, Springer, vol. 26(1), pages 55-71, August.
- Krüger, Dirk & Perri, Fabrizio, 2002. "Does Income Inequality Lead to Consumption Inequality?," CEPR Discussion Papers 3583, C.E.P.R. Discussion Papers.
- Sandra E. Black & Donald P. Morgan, 1999. "Meet the new borrowers," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 5(Feb).
- Ken Cavalluzzo & John Wolken, 2002.
"Small business loan turndowns, personal wealth and discrimination,"
Finance and Economics Discussion Series
2002-35, Board of Governors of the Federal Reserve System (U.S.).
- Ken Cavalluzzo & John Wolken, 2005. "Small Business Loan Turndowns, Personal Wealth, and Discrimination," The Journal of Business, University of Chicago Press, vol. 78(6), pages 2153-2178, November.
- Lynn Fox & Joy Hoffmann, 2004. "Federal Reserve personal financial education initiatives," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Aut, pages 447-457.
- David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 2003.
"Discrimination in the Small-Business Credit Market,"
The Review of Economics and Statistics,
MIT Press, vol. 85(4), pages 930-943, November.
- David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 1998. "Discrimination in the Small Business Credit Market," NBER Working Papers 6840, National Bureau of Economic Research, Inc.
- Timothy Bates, 2001. "Financing the development of urban minority communities: lessons from history," Communities and Banking, Federal Reserve Bank of Boston, issue Sum, pages 12-15.
- Christian E. Weller, 2007.
"Have Differences in Credit Access Diminished in an Era of Financial Market Deregulation?,"
wp144, Political Economy Research Institute, University of Massachusetts at Amherst.
- Christian Weller, 2010. "Have Differences in Credit Access Diminished in an Era of Financial Market Deregulation?," Review of Social Economy, Taylor & Francis Journals, vol. 68(1), pages 1-34.
- Allen N. Berger, 2002.
"The economic effects of technological progress: evidence from the banking industry,"
Finance and Economics Discussion Series
2002-50, Board of Governors of the Federal Reserve System (U.S.).
- Berger, Allen N, 2003. " The Economic Effects of Technological Progress: Evidence from the Banking Industry," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(2), pages 141-76, April.
- Chakravarty, Sugato, 2002. "Relationships and Rationing in Consumer Loans: Evidence from the Nineties," Purdue University Economics Working Papers 1153, Purdue University, Department of Economics.
- Gary Dymski, 1995. "The theory of bank redlining and discrimination: An exploration," The Review of Black Political Economy, Springer, vol. 23(3), pages 37-74, March.
- repec:fip:fedhpr:y:2001:i:apr:p:217-236 is not listed on IDEAS
- Raphael Bostic & Hamid Mehran & Anna Paulson & Marc Saidenberg, 2002.
"Regulatory incentives and consolidation: the case of commercial bank mergers and the Community Reinvestment Act,"
Working Paper Series
WP-02-06, Federal Reserve Bank of Chicago.
- Bostic Raphael & Paulson Anna L & Mehran Hamid & Saidenberg Marc, 2005. "Regulatory Incentives and Consolidation: The Case of Commercial Bank Mergers and the Community Reinvestment Act," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-27, April.
- Marianne A. Hilgert & Jeanne M. Hogarth & Sondra G. Beverly, 2003. "Household financial management: the connection between knowledge and behavior," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 309-322.
- Aigbe Akhigbe & Jeff Madura, 2004. "Bank acquisitions of security firms: the early evidence," Applied Financial Economics, Taylor & Francis Journals, vol. 14(7), pages 485-496.
- Gregory Elliehausen & Michael E. Staten, 2004. "Regulation of Subprime Mortgage Products: An Analysis of North Carolina's Predatory Lending Law," The Journal of Real Estate Finance and Economics, Springer, vol. 29(4), pages 411-433, December.
- H. Semih Yildirim & Seung-Woog (Austin) Kwag & M. Cary Collins, 2006. "An Examination of the Equity Market Response to The Gramm-Leach-Bliley Act Across Commercial Banking, Investment Banking, and Insurance Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(9-10), pages 1629-1649.
- Hans G. Bloemen & Elena G. F. Stancanelli, 2005. "Financial Wealth, Consumption Smoothing and Income Shocks Arising from Job Loss," Economica, London School of Economics and Political Science, vol. 72(3), pages 431-452, 08.
- Stephen L. Ross, 2005. "The Continuing Practice and Impact of Discrimination," Working papers 2005-19, University of Connecticut, Department of Economics, revised Jul 2006.
- Isabelle Agier & Ariane Szafarz, 2011. "Credit to Women Entrepreneurs: The Curse of the Trustworthier Sex," Working Papers CEB 11-005, ULB -- Universite Libre de Bruxelles.
- Isabelle Agier & Ariane Szafarz, 2010.
"Microfinance and Gender: Is There a Glass Ceiling in Loan Size?,"
Working Papers CEB
10-047, ULB -- Universite Libre de Bruxelles.
- Agier, Isabelle & Szafarz, Ariane, 2013. "Microfinance and Gender: Is There a Glass Ceiling on Loan Size?," World Development, Elsevier, vol. 42(C), pages 165-181.
- Isabelle Agier & Ariane Szafarz, 2013. "Microfinance and Gender: Is There a Glass Ceiling on Loan Size?," ULB Institutional Repository 2013/149090, ULB -- Universite Libre de Bruxelles.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Judy Fogg).
If references are entirely missing, you can add them using this form.