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Race, Ethnicity, and Credit Card Marketing
Author(s) -
FIRESTONE SIMON
Publication year - 2014
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12138
Subject(s) - credit card , race (biology) , ethnic group , credit history , agency (philosophy) , credit reference , business , sample (material) , confidentiality , payment , actuarial science , aggregate data , marketing , demographic economics , economics , credit risk , finance , political science , sociology , medicine , gender studies , social science , chemistry , chromatography , pathology , law
There is a vast literature on discrepancies in consumer credit related to race and ethnicity. I explore a pattern that was first identified in aggregate data by Han, Keys, and Li ([Han, Song, 2011]) in their study of credit access: Blacks were approximately 27% less likely to receive offers from credit card lenders during the sample period, even after controlling for variables such as credit history, household income, and local economic conditions. Hispanics were 17% less likely to receive an offer, after including controls. The discrepancy is robust to lender‐specific regressions and the inclusion of a large number of explanatory variables. My findings imply that marketing is an important area for analysis of discrimination in consumer credit. Due to the likely need for confidential information in further analysis, investigation by an appropriate regulatory agency such as the Consumer Financial Protection Bureau would be useful.