Is There Discriminatory Mortgage Pricing Against Immigrants in the Spanish Lending Market?
Universitat Rovira i Virgili; Institute for the Study of Labor (IZA)
affiliation not provided to SSRN
IZA Discussion Paper No. 5578
In this paper, we investigate whether evidence of discriminatory treatment against immigrants in the Spanish mortgage market exists. More specifically, we test whether, ceteris paribus, immigrant borrowers tend to be charged with higher interest rates on their mortgages than their Spanish born counterparts. To do so, we use a unique dataset on granted mortgages that contains information not only regarding the conditions of the loan but also the socio-economic characteristics of the mortgagors. We observe that immigrants are systematically charged with higher interest rates. We apply the well known Oaxaca-Blinder decomposition to measure the extent to which this disparate treatment of lenders in mortgage pricing against immigrants is due to discrimination. Our results indicate that approximately two thirds of the gap in the interest rate between Spanish born and immigrant borrowers can be attributed to discriminatory treatment.
Number of Pages in PDF File: 37
Keywords: immigration, discrimination, mortgage pricing, housing market
JEL Classification: R21, G21, J14working papers series
Date posted: March 21, 2011
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo4 in 0.359 seconds