Do Women Pay More for Mortgages?
Florida Atlantic University - Finance
Zhenguo (Len) Lin
Hollo School of Real Estate, Florida International University
Dept. of Finance, Insurance, Real Estate and Law, University of North Texas
October 11, 2011
Journal of Real Estate Finance and Economics, Vol. 43, No. 4, 2011
This paper documents women on average pay more for mortgages than men. The disparity cannot be fully explained by traditional variables such as mortgage features, borrower characteristics, and market conditions. While the persistence of gender disparity may suggest discrimination, we offer a different explanation: women pay higher rates because they are more likely to choose lenders by recommendation while men tend to search for the lowest rate. Our empirical test confirms that search effort is rewarded in marketplace, and suggests that gender disparity in mortgage rates may be addressed by policies aimed at improving women's financial literacy and search skills.
Keywords: Mortgage, Gender discrimination, Borrower behavior, Interest rates
Date posted: October 13, 2011
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