Self-selection and discrimination in credit markets

Stanley D. Longhofer and Stephen R. Peters

No 9809, Working Paper from Federal Reserve Bank of Cleveland

Abstract: This paper increases understanding of the causes and consequences of discrimination in credit markets. It develops an underwriting model in which lenders use a simple Bayesian updating process to evaluate applicant creditworthiness. It also models individuals' self-selection behavior to show how market frictions can affect application decisions.

Keywords: Mortgages; Discrimination in consumer credit (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-fmk, nep-ifn and nep-mic
Date: Written 1998
View list of references View citations in EconPapers

Downloads: (external link)
http://www.clevelandfed.org/research/workpaper/1998/Wp9809.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper from Federal Reserve Bank of Cleveland
Contact information at EDIRC.
Series data maintained by Diane Rosenberger ().