Appraisers and Valuation Bias: An Empirical Analysis

Abstract

Using appraisals from a lender across the 2005-06 period, we find that the association between appraisers' valuation inflation patterns and work volume varies across states. Moreover, we find a considerable occupational exit for appraisers, and provide evidence that appraisers, as applicants, did not receive better loan pricing compared with the population of applicants. Overall, this paper offers novel insights concerning the political economy of financial regulation through the lens of a specific profession.

Keywords: Appraisal bias, Appraisers, Home Valuation Code of Conduct

JEL Classification: G28, L85