Racial differences in short-run earnings stabilityand implications for credit markets
This paper examines the claim that observed racial differences in rejection rates for mortgage applications, which persist after controlling for many relevant factors, are due to racial differences in short-run earnings stability, which has not typically been included in empirical tests. The evidence does not support the proposition that blacks suffer from greater earnings instability than comparable whites, as few consistent significant differences between black and white earnings volatility are found. Only in the case of drastic earnings shocks with persistent effects does the possibility of significant racial differences reasonably remain. In general, racial differences in earnings stability appear to be minor and are unlikely to result in substantial differences in creditworthiness
|Date of creation:||1997|
|Date of revision:|
|Contact details of provider:|| Postal: 20th Street and Constitution Avenue, NW, Washington, DC 20551|
Web page: http://www.federalreserve.gov/
More information through EDIRC
|Order Information:||Web: http://www.federalreserve.gov/pubs/feds/fedsorder.html|
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.:
- Christopher D. Carroll, 1991. "Buffer stock saving and the permanent income hypothesis," Working Paper Series / Economic Activity Section 114, Board of Governors of the Federal Reserve System (U.S.).
- Lee A. Lillard & Robert J. Willis, 1976.
"Dynamic Aspects of Earnings Mobility,"
NBER Working Papers
0150, National Bureau of Economic Research, Inc.
- Hunter, William C & Walker, Mary Beth, 1996.
"The Cultural Affinity Hypothesis and Mortgage Lending Decisions,"
The Journal of Real Estate Finance and Economics,
Springer, vol. 13(1), pages 57-70, July.
- William C. Hunter & Mary Beth Walker, 1995. "The cultural affinity hypothesis and mortgage lending decisions," Working Paper Series, Issues in Financial Regulation 95-8, Federal Reserve Bank of Chicago.
- Angus Deaton, 1989.
"Saving and Liquidity Constraints,"
NBER Working Papers
3196, National Bureau of Economic Research, Inc.
- 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.
- Raphael W. Bostic, 1997. "The role of race in mortgage lending: revisiting the Boston Fed study," Finance and Economics Discussion Series 1997-2, Board of Governors of the Federal Reserve System (U.S.).
- Paul Ong & Janette Lawrence, 1995. "Race and employment dislocation in California’s aerospace industry," The Review of Black Political Economy, Springer;National Economic Association, vol. 23(3), pages 91-101, March.
- Gottschald, Peter T, 1982. "Earnings Mobility: Permanent Change or Transitory Fluctuations," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 450-56, August.
- Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
- James A. Berkovec & Glenn B. Canner & Stuart A. Gabriel & Timothy H. Hannan, 1994. "Race, redlining, and residential mortgage loan performance," Proceedings, Federal Reserve Bank of Philadelphia, pages 263-298.
- Berkovec, James A, et al, 1994. "Race, Redlining, and Residential Mortgage Loan Performance," The Journal of Real Estate Finance and Economics, Springer, vol. 9(3), pages 263-94, November.
When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:1997-34. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marlene Vikor)
If references are entirely missing, you can add them using this form.