To Lend or Not to Lend: Revealed Attitudes towards Gender, Ethnicity, Weight, and Age in the U.S.

Abstract

This paper investigates attitudes towards gender, ethnicity, weight, and age in the U.S. from peer-to-peer credit markets. With detailed data on both the lending decision and loan performance, we are substantially better able to distinguish between taste based discrimination consistent with Becker (1957) and statistical discrimination than extant studies which suffer from significant correlated omitted variable problems.On the one hand, our results suggest that women, African Americans, and older people receive favorable treatment. On other hand, we find significant taste-based discrimination against Hispanics, Asians, younger, and overweight people. Overall, these findings are consistent with a positive shift in attitudes towards women and African-Americans, at least among individual investors that participate in peer-to-peer lending markets. At the same time, negative attitudes towards Hispanics, Asians, and possibly overweight people (still) exist.

Keywords: Discrimination, consumer credit, peer-to-peer lending

JEL Classification: D81, D83, G21