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Mortgage Lending Discrimination and the Decision to Apply: A Methodological Note
Author(s) -
Bloom David E.,
Preiss Beth,
Trussell James
Publication year - 1983
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 - 10.1111/1540-6229.00282
Subject(s) - loan , actuarial science , selection (genetic algorithm) , economics , selection bias , test (biology) , econometrics , computer science , finance , statistics , artificial intelligence , mathematics , paleontology , biology
Previous studies of lenders' decisions to accept or reject loan applications have not accounted for the possibility that lenders discourage written applications from members of protected classes, i.e., prescreening. This paper discusses how prescreening and self‐selection may bias the measurement of discrimination. Estimation techniques are developed that test and correct for such bias whether or not information is available on non‐applicants.