Loan performance and race |
| |
| Authors: | RE Martin RC Hill |
| |
| Affiliation: | Department of Economics, Centre College, Danville, Kentucky 40422, USA Phone: 606 238 5260 Fax: 606 236 7925 E-mail:;Department of Economics, Louisiana State University, Baton Rouge, Louisiana 70803, USA Phone: 225 388 1490 Fax: 225 388 3807 E-mail: |
| |
| Abstract: | Recent studies find evidence of racial discrimination in mortgage markets. Although these studies explore loan approval rates for whites versus minorities, they do not specifically consider loan performance, either in the form of default rates or loan administration costs. This study considers discrimination in the used car credit market, where the collateral is not subject to location externalities, collateral value and quality do not vary as much as in real estate, and the loan terms are shorter. We find administration costs and default rates are higher for minorities than for whites, controlling for age, income, home ownership, wealth, occupation, loan terms, and geographic location. |
| |
| Keywords: | |
|
|
