Mortgage lending in Chicago and Los Angeles: A paired testing study of the pre-application process

Stephen L. Ross; Margery Austin Turner; Erin Godfrey; Robin R. Smith

doi:10.1016/j.jue.2007.07.006

Mortgage lending in Chicago and Los Angeles: A paired testing study of the pre-application process

Stephen L. Ross, Margery Austin Turner, Erin Godfrey, Robin R. Smith

Research output: Contribution to journal › Article › peer-review

Abstract

In 2000, the Urban Institute paired African-American and Hispanic testers with whites and sent the pairs to visit lenders in Chicago and Los Angeles, in order to inquire about information on obtaining a home mortgage. In Chicago, African Americans and Hispanics systematically received less information and assistance than comparable whites; while in Los Angeles, the treatment of minority and white testers did not differ statistically from each other. Multivariate analyses for Chicago indicate that large lenders treat minorities more favorably than smaller lenders and that lenders with substantial numbers of applications from African-Americans treat African-Americans more favorably than lenders with predominantly white application pools.

Original language	English (US)
Pages (from-to)	902-919
Number of pages	18
Journal	Journal of Urban Economics
Volume	63
Issue number	3
DOIs	https://doi.org/10.1016/j.jue.2007.07.006
State	Published - May 2008

Keywords

Discrimination
Fair lending
Mortgage lending
Paired testing

ASJC Scopus subject areas

Economics and Econometrics
Urban Studies

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10.1016/j.jue.2007.07.006

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title = "Mortgage lending in Chicago and Los Angeles: A paired testing study of the pre-application process",

abstract = "In 2000, the Urban Institute paired African-American and Hispanic testers with whites and sent the pairs to visit lenders in Chicago and Los Angeles, in order to inquire about information on obtaining a home mortgage. In Chicago, African Americans and Hispanics systematically received less information and assistance than comparable whites; while in Los Angeles, the treatment of minority and white testers did not differ statistically from each other. Multivariate analyses for Chicago indicate that large lenders treat minorities more favorably than smaller lenders and that lenders with substantial numbers of applications from African-Americans treat African-Americans more favorably than lenders with predominantly white application pools.",

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