Credit Card Redlining

Ethan Cohen-Cole
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Ethan Cohen-Cole: University of Maryland–College Park

The Review of Economics and Statistics, 2011, vol. 93, issue 2, 700-713

Abstract: This paper evaluates the presence of racial disparities in the issuance of consumer credit. Using a database of credit histories, I link location-based information on race with individual credit files. After controlling for place-specific factors such as housing vacancy rates and general population demographics, I find qualitatively large differences in the amount of credit offered to similarly qualified applicants living in black versus white areas. High data quality allows distinguishing between issuer-provision (supply) and utilization of credit (demand). Additional estimates using information on payday lending provide support for idea that issuers condition lending on location. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2011
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