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Neighborhood Racial Characteristics, Credit History, and Bankcard Credit in Indian Country

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Listed:
  • Valentina Dimitrova-Grajzl
  • Peter Grajzl
  • A. Joseph Guse
  • Richard M. Todd
  • Michael Williams

Abstract

We examine whether concerns about lenders’ discrimination based on community racial characteristics can be empirically substantiated in the context of neighborhoods on and near American Indian reservations. Drawing on a large-scale dataset consisting of individual-level credit bureau records and utilizing approaches that aim to isolate supply from demand considerations, we find that residing in a predominantly American Indian neighborhood is ceteris paribus associated with lower awarded bankcard credit limits than residing in a neighborhood where the share of American Indian residents is low. We further find that consumer’s credit history is a robust and quantitatively more important predictor of awarded bankcard credit limits than racial composition of the consumer's neighborhood, and that the awarded bankcard credit limits do not depend on the consumer's location vis-à-vis a reservation.

Suggested Citation

  • Valentina Dimitrova-Grajzl & Peter Grajzl & A. Joseph Guse & Richard M. Todd & Michael Williams, 2015. "Neighborhood Racial Characteristics, Credit History, and Bankcard Credit in Indian Country," CESifo Working Paper Series 5594, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5594
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    bankcard credit; American Indian reservations; discrimination; neighborhood racial characteristics; credit history;

    JEL classification:

    • 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
    • P43 - Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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