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Racial/Ethnic Discrimination in USDA’s Direct Farm Lending Programs

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  • Dodson, Charles B.

Abstract

An analysis of default by racial and ethnic minorities is estimated for direct farm loans made by USDA’s Farm Service Agency (FSA) in fiscal 2005. Logit model results indicated that when controlling for creditworthiness, Blacks who received FSA direct loans had higher default rates suggesting they were generally less creditworthy. This would not be consistent with the Becker ‘taste based’ discrimination model and provides no evidence of discrimination either by FSA or by commercial lenders. Higher default rates for other racial minorities and women provide no evidence of discrimination among other SDA groups.

Suggested Citation

  • Dodson, Charles B., 2013. "Racial/Ethnic Discrimination in USDA’s Direct Farm Lending Programs," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150492, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:150492
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    File URL: http://purl.umn.edu/150492
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    References listed on IDEAS

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    1. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, April.
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    Keywords

    Racial discrimination; FSA direct lending; taste-based discrimination; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Institutional and Behavioral Economics;

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