Mortgage Lending Discrimination and the Decision to Apply: A Methodological Note
Beth Preiss and
Real Estate Economics, 1983, vol. 11, issue 1, 97-103
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.
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