Newsgroups: alt.discrimination,sci.econ
Subject: Re: Mortgage bias
From: <KRB104@psuvm.psu.edu>
Date: Fri, 6 Nov 1992 07:14:36 EST
Organization: Penn State University

In article <1992Nov5.214143.10826@midway.uchicago.edu>, thf2@ellis.uchicago.edu
(Mmmm... Purple) says:
>
>In article <92302.070117KRB104@psuvm.psu.edu> KRB104@psuvm.psu.edu writes:
>>
>>  In a Federal Reserve Bank of Boston study, rejection disparities were found
>>to be prevalent among lenders in its region, EVEN WHEN FACTORS OTHER THAN
>>INCOME (like collateral available and credit history) are considered.
>
>You say other factors than income are considered, but I don't see them
>considered in that stats below.  For that matter, I wasn't aware that
>income was a binary variable ("low" or "high").  What was the cutoff?
>Do banks really judge $49,999 incomes differently from $50,000 incomes
>if $50K was the cutoff?
>

    Obviously someone with an elementary knowledge of statistics.  Using binary
or trinary classifications for a variable is well accepted in statistics.  This
is a minor point which really doens't get to the crux of the matter being
discussed.  Obviously you haven't heard of logistic models which treat binary
variables as the dependent variables in analysis, this is a widely used tech-
nique
>>  This conversation has come up on this network plenty of times, with some
>>people arguing that this is so because Blacks and Hispanics have poorer
>>people arguing that this is so because Blacks and Hispanics have poorer
>>people arguing that this is so because Blacks and Hispanics have poorer
>>credit history (though I have never seen data on this) and less collateral   n
>tha
>>whites.  I think this study shuts those people up.  What they found was that
>>among highincome applicants, 9.7% of whites were rejected, 13.6% of Asians,
>>19.l8% of Hispanics, and 23.2% of blacks.    Among low income applicants,
>>31.5% of whites, 20.2% of Asians, 37.1% of Hispanics and 48.2% of Blacks.
>>The overall rate was 14.2% of whites, 12.8% of Asians, 21.4% of Hispanics and
>>33.6% of blacks (these numbers are for 1990).
>
>Are you arguing that white bankers discriminate against whites in favor
>of Asians?  Sounds kind of counterintuitive.
>
>Still waiting for a study that's honest.... The complete lack of one
>makes me suspect that if someone did an honest study, there would be
>no evidence of racism, which is why we only see the bogus studies...
>--
  I do not see what Mr. Frank is speaking of.  For the low income class, Asians
have a statistically different rejection rate, while for the upper income the
result does not appear to be significant.  Sociologically, it is known that
Asians tend to pool their money to get ahead, and this is more prevalent in
the lower income levels.  Do whites do this?  Blacks?  I do not think this
study is bogus.  In earlier studies that have been posted to this network, Mr.
Frank has stated that the studies were flawed because assets and credit history
were not taken into account.  Well this one does, so Mr. Frank comes up with
something totally bogus to try to discredit this study (income not being a
binary variable).  Then he states that it can't be discrimination because
asians come out better then Whites, which the data does not clearly say.  What
the data clearly shows is that Blacks are being rejected at a far greater rate
then whites gfiven the same credit history and assets, and the differences are
vastly significant ACROSS THE BOARD.  Mr. Frank there is discrimination in this
industry, something this industry knows and wants to correct but hasn't.  If
there wasn't, why does the justice department have a separate department that
looks in to this?  If there was no discrimination, there would be no need for
this department and Mr. Frank should be yelling about wasted tax dollars.
  There is no such thing as a perfect study, anyone can sit in their ivory
tower and criticize, especially when they only have an elementary knowledge
about the statistics involved.  If Mr. Frank, or anyone else knows of a perfect
study let the world know, because it would be world wide news.  This study is
good becasue it takes things into account that other studies haven't.
Newsgroups: alt.discrimination