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Seminarios académicos y conferencias

Daniel Paravisini, London School of Economics

"Measuring Bias in Consumer Lending"

Coautoreado con Will Dobbie, Andrés Liberman y Vikram Pathania

8 Agosto 2019 - 17:00

Sala 113, Facultad de Ciencias Económicas y Administrativas UC

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Abstract: This paper tests for bias in consumer lending using administrative data from a high-cost lender in the United Kingdom. We motivate our analysis using a new principal-agent model of bias, which predicts that profits should be higher for the most illiquid loan applicants at the margin if loan examiners are biased. We identify the profitability of marginal applicants using the quasi-random assignment of loan examiners. Consistent with our model, we find significant bias against immigrant and older applicants when using the firm’s preferred measure of long-run profits, but not when using the short-run measure used to evaluate examiner performance.