Self-selection and discrimination in credit markets
Stanley D. Longhofer and
Stephen R. Peters
No 9809, Working Papers (Old Series) from Federal Reserve Bank of Cleveland
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)
Date: 1998, Revised 1998
New Economics Papers: this item is included in nep-cfn, nep-fmk, nep-ifn and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:9809
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