To Lend or Not to Lend: Revealed Attitudes towards Gender, Ethnicity, Weight, and Age in the U.S.

37 Pages Posted: 30 Jul 2014 Last revised: 24 Oct 2015

See all articles by Jefferson Duarte

Jefferson Duarte

Rice University

Stephan Siegel

University of Washington - Michael G. Foster School of Business; CESifo

Lance A. Young

University of Washington - Department of Finance and Business Economics

Date Written: October 19, 2015

Abstract

This paper investigates attitudes towards gender, ethnicity, weight, and age in the U.S. from peer-to-peer credit markets. With detailed data on both the lending decision and loan performance, we are substantially better able to distinguish between taste based discrimination consistent with Becker (1957) and statistical discrimination than extant studies which suffer from significant correlated omitted variable problems.On the one hand, our results suggest that women, African Americans, and older people receive favorable treatment. On other hand, we find significant taste-based discrimination against Hispanics, Asians, younger, and overweight people. Overall, these findings are consistent with a positive shift in attitudes towards women and African-Americans, at least among individual investors that participate in peer-to-peer lending markets. At the same time, negative attitudes towards Hispanics, Asians, and possibly overweight people (still) exist.

Keywords: Discrimination, consumer credit, peer-to-peer lending

JEL Classification: D81, D83, G21

Suggested Citation

Duarte, Jefferson and Siegel, Stephan and Young, Lance A., To Lend or Not to Lend: Revealed Attitudes towards Gender, Ethnicity, Weight, and Age in the U.S. (October 19, 2015). Available at SSRN: https://ssrn.com/abstract=2473240 or http://dx.doi.org/10.2139/ssrn.2473240

Jefferson Duarte (Contact Author)

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
713.3486137 (Phone)

Stephan Siegel

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

HOME PAGE: http://faculty.washington.edu/ss1110/

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Lance A. Young

University of Washington - Department of Finance and Business Economics ( email )

Box 353200
Seattle, WA 98195
United States

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