Journal article
The cultural affinity hypothesis and mortgage lending decisions
The journal of real estate finance and economics, Vol.13(1), pp.57-70
07/01/1996
DOI: 10.1007/BF00174551
Abstract
This paper conducts an empirical analysis of the cultural affinity hypothesis put forth by Calomiris, et al. (1994) in the mortgage lending market. This hypothesis implies that white loan officers, because of a lack of familiarity with minority applicants, will rely more heavily on characteristics that can be observed at low cost (e.g., objective loan application measures) in evaluating the creditworthiness of minority applicants relative to white applicants. Using a cleansed sample of 1,991 loan applications drawn from data collected by the Federal Reserve Bank of Boston, the results of the analysis were consistent with the cultural affinity hypothesis. In particular, we found that marginal black and Hispanic applicants appeared to be held to higher quantitative standards on such objective factors as credit history and debt obligation ratios than were similarly situated marginal white applicants.
Details
- Title: Subtitle
- The cultural affinity hypothesis and mortgage lending decisions
- Creators
- William C. Hunter - Federal Reserve Bank of ChicagoMary Beth Walker - Georgia State University
- Resource Type
- Journal article
- Publication Details
- The journal of real estate finance and economics, Vol.13(1), pp.57-70
- DOI
- 10.1007/BF00174551
- ISSN
- 0895-5638
- eISSN
- 1573-045X
- Number of pages
- 14
- Language
- English
- Date published
- 07/01/1996
- Academic Unit
- Finance
- Record Identifier
- 9984962550302771
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