Detecting Double Discrimination in the Credit Market

30 Pages Posted: 15 May 2018

See all articles by Anastasia Cozarenco

Anastasia Cozarenco

Montpellier Business School; Université Montpellier II - Montpellier Research in Management (MRM); Université Libre de Bruxelles (ULB) - CERMi (Centre for European Research in Microfinance)

Ariane Szafarz

Université Libre de Bruxelles (ULB), Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi

Date Written: April 18, 2018

Abstract

The design of tests for discrimination in the credit market is controversial. This paper revisits the issue and pays special attention to double discrimination, which consists in targeting loan applicants who belong simultaneously to two vulnerable groups. Double discrimination may take different forms, some of which contrast with the addition of two one-dimensional biases. Our novel testing methodology, based on recovery rates, rationalizes the fact that double discrimination can exist irrespectively of the presence of simple discrimination. We illustrate our suggested approach using a microcredit case study involving positive discrimination.

Keywords: Discrimination in Lending, Credit Market, Double Discrimination, Gender, Race, Ethnicity, Recovery Rate

JEL Classification: C12, C44, J15, J16, G21, D63

Suggested Citation

Cozarenco, Anastasia and Szafarz, Ariane, Detecting Double Discrimination in the Credit Market (April 18, 2018). Available at SSRN: https://ssrn.com/abstract=3172910 or http://dx.doi.org/10.2139/ssrn.3172910

Anastasia Cozarenco (Contact Author)

Montpellier Business School ( email )

Université Montpellier II - Montpellier Research in Management (MRM) ( email )

Place Eugène Bataillon
Montpellier, 34095
France

Université Libre de Bruxelles (ULB) - CERMi (Centre for European Research in Microfinance) ( email )

Campus du Solbosch
Avenue F.D. Roosevelt 21 - CP145/1
B-1050 Brussels
Belgium

Ariane Szafarz

Université Libre de Bruxelles (ULB), Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi ( email )

50 Avenue Roosevelt
Brussels 1050
Belgium

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