Measuring Fairness in the U.S. Mortgage Market

Hadi Elzayn (), Simon Freyaldenhoven, Ryan Kobler and Minchul Shin
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Ryan Kobler: https://www.philadelphiafed.org/our-people/ryan-kobler

No 25-04, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: Black Americans are both substantially more likely to have their mortgage application rejected and substantially more likely to default on their mortgages than White Americans. We take these stark inequalities as a starting point to ask the question: How fair or unfair is the U.S. mortgage market? We show that the answer to this question crucially depends on the definition of fairness. We consider six competing and widely used definitions of fairness and find that they lead to markedly different conclusions. We then combine these six definitions into a series of stylized facts that offer a more comprehensive view of fairness in this market. To facilitate further exploration, an interactive Online Appendix allows the user to examine our fairness measurements further across both time and space.

Keywords: fairness; discrimination; inequality; measurement; algorithmic decisions; HMDA (search for similar items in EconPapers)
JEL-codes: D63 G21 G28 J15 R21 (search for similar items in EconPapers)
Pages: 48
Date: 2025-02-04
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:99500

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DOI: 10.21799/frbp.wp.2025.04

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