Do Laws Change Minds? Evidence From Same-Sex Marriage Laws and Lending Practices to Sexual Minorities

Posted: 23 Aug 2019

See all articles by Jens Hagendorff

Jens Hagendorff

University of Edinburgh - Business School

Duc Duy Nguyen

King's College London

Vathunyoo Sila

University of Edinburgh

Date Written: August 20, 2019

Abstract

We exploit the staggered adoption of same-sex marriage (SSM) legalization to examine its effect on lending practices toward same-sex borrowers. We use loan-level data from the Home Mortgage Disclosure Act between 2004-2018, a period that spans the entire rollout of SSM legalization across the United States. We find that following SSM legalization, the probability that same-sex mortgage applicants are denied credit increases compared to otherwise similar different-sex applicants. This backlash is concentrated among states in which SSM legalization is imposed by state or federal courts rather than by public votes or state legislatures. Our results present a contrasting view to a recent literature that documents a positive influence of SSM legalization on the social attitudes towards same-sex couples.

Keywords: banks, mortgages, same-sex marriage, sexual orientation, LGBT

JEL Classification: G21, K36

Suggested Citation

Hagendorff, Jens and Nguyen, Duc Duy and Sila, Vathunyoo, Do Laws Change Minds? Evidence From Same-Sex Marriage Laws and Lending Practices to Sexual Minorities (August 20, 2019). Available at SSRN: https://ssrn.com/abstract=3440605

Jens Hagendorff (Contact Author)

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
UNITED KINGDOM

Duc Duy Nguyen

King's College London ( email )

Strand
London, England WC2R 2LS
United Kingdom

HOME PAGE: http://sites.google.com/site/louisnguyen6589/home

Vathunyoo Sila

University of Edinburgh ( email )

29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
United Kingdom
+447428747109 (Phone)

HOME PAGE: http://https://www.business-school.ed.ac.uk/staff/ben-sila

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