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An Indirect Test for Differential Treatment of Borrowers in Mortgage Markets
Author(s) -
Shear William B.,
Yezer Anthony M. J.
Publication year - 1982
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00272
Subject(s) - differential treatment , race (biology) , differential (mechanical device) , economics , test (biology) , database transaction , property (philosophy) , property value , transaction cost , demographic economics , differential effects , actuarial science , business , microeconomics , finance , sociology , medicine , engineering , international trade , gender studies , paleontology , philosophy , epistemology , computer science , biology , programming language , aerospace engineering , real estate
The indirect test implemented in this paper is based on the economics of discrimination which hypothesizes that differential treatment of borrowers, on the basis of age, race, sex, or property location, at any stage of the mortgage transaction, including prescreening, results in segregation of those getting less favorable treatment. Borrowers who perceive that they are receiving less favorable treatment based on age, race, sex, or property location would be segregated into the FHA‐in‐sured sector. Estimates of an FHA participation equation show no evidence of such segregation by sex, race, or center city property location. Younger borrowers do appear to be differentially concentrated in the FHA programs.