Neighborhood Racial Characteristics, Credit History, and Bankcard Credit in Indian Country

39 Pages Posted: 11 Dec 2015

See all articles by Valentina P. Dimitrova-Grajzl

Valentina P. Dimitrova-Grajzl

Virginia Military Institute

Peter Grajzl

Washington and Lee University - Department of Economics; CESifo

A. Joseph Guse

Washington and Lee University - Williams School of Commerce, Economics, and Politics

Richard M. Todd

affiliation not provided to SSRN

Michael Williams

Federal Reserve Banks - Federal Reserve Bank of Minneapolis

Multiple version iconThere are 3 versions of this paper

Date Written: November 1, 2017

Abstract

We examine whether concerns about lenders’ discrimination based on community racial characteristics can be empirically substantiated in the context of neighborhoods on and near American Indian reservations. Drawing on a large-scale dataset consisting of individual-level credit bureau records and utilizing approaches that aim to isolate supply from demand considerations, we find that residing in a predominantly American Indian neighborhood is ceteris paribus associated with lower awarded bankcard credit limits than residing in a neighborhood where the share of American Indian residents is low. We further find that consumer’s credit history is a robust and quantitatively more important predictor of awarded bankcard credit limits than racial composition of the consumer's neighborhood, and that the awarded bankcard credit limits do not depend on the consumer's location vis-à-vis a reservation.

Keywords: bankcard credit, American Indian reservations, discrimination, neighborhood racial characteristics, credit history

JEL Classification: G210, J150, P430, R110

Suggested Citation

Dimitrova-Grajzl, Valentina P. and Grajzl, Peter and Guse, A. Joseph and Todd, Richard and Williams, Michael, Neighborhood Racial Characteristics, Credit History, and Bankcard Credit in Indian Country (November 1, 2017). CESifo Working Paper Series No. 5594. Available at SSRN: https://ssrn.com/abstract=2701735

Valentina P. Dimitrova-Grajzl

Virginia Military Institute ( email )

Department of Economics and Business
Scott Shipp Hall
Lexington, VA 24450
United States

Peter Grajzl (Contact Author)

Washington and Lee University - Department of Economics ( email )

Lexington, VA 24450
United States

HOME PAGE: http://home.wlu.edu/~grajzlp/

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

A. Joseph Guse

Washington and Lee University - Williams School of Commerce, Economics, and Politics ( email )

Lexington, VA 24450
United States

Richard Todd

affiliation not provided to SSRN

Michael Williams

Federal Reserve Banks - Federal Reserve Bank of Minneapolis ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States

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