Lending patterns in poor neighborhoods

Francisca G.-C. Richter and Ben Craig

Journal of Economic Behavior & Organization, 2013, vol. 95, issue C, 197-206

Abstract: Concentrated poverty has been said to impose a double burden on those that confront it. In addition to an individual's own financial constraints, institutions and social networks of poor neighborhoods can further limit access to quality services and resources for those that live there. This study contributes to the characterization of subprime lending in poor neighborhoods by including a spatial dimension to the analysis, in an attempt to capture social – endogenous and exogenous interaction – effects differences in poor and less poor neighborhoods. The analysis is applied to 2004–2006 census tract level data in Cuyahoga County, home to Cleveland, OH, a region that features urban neighborhoods highly segregated by income and race. The patterns found in poor neighborhoods suggest stronger social effects inducing subprime lending in comparison to less poor neighborhoods.

Keywords: Subprime lending; Spatial panel; Aggregate data (search for similar items in EconPapers)
JEL-codes: I32 R12 R21 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Working Paper: Lending patterns in poor neighborhoods (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:95:y:2013:i:c:p:197-206

DOI: 10.1016/j.jebo.2013.03.005

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