Measuring Applicant Quality to Detect Discrimination In Peer-to-Peer Lending

Georg Weizsäcker and Christian Zankiewicz

No 13, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: We measure the quality of applications for online peer-to-peer lending in Germany and relate it to gender discrimination. The data context allows summarizing application quality as a single numeric measure, the expected internal rate of return. The measure serves as a control variable and is interacted with the applicants\' gender. We find that women enjoy higher funding rates than men, mainly because they are less punished when they offer a low application quality. The evidence is consistent with the hypothesis that the predominantly male lenders have a less precise understanding of women\'s applications than of men\'s applications.

Keywords: Gender discrimination; household finance; irrational beliefs (search for similar items in EconPapers)
JEL-codes: D14 D84 (search for similar items in EconPapers)
Date: 2017-03-25
New Economics Papers: this item is included in nep-gen and nep-pay
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