What constitutes evidence of discrimination in lending?

Article Abstract:

We analyze a simple model of bank lending in order to ascertain what can be inferred from relative denial and default rates about lending discrimination. We show that if minority applicants are of lower average creditworthiness than majority applicants, then, contrary to a popular argument, a uniform, nondiscriminatory credit policy cannot simultaneously produce (i) higher denial rates for minority applicants, and (ii) equal default rates for minority and majority applicants. Moreover, we show that equality of denial or default rates always implies discrimination. In particular, equal denial (default) rates imply discrimination against majority (minority) applicants. (Reprinted by permission of the publisher.)

Research, Discrimination in consumer credit, Credit discrimination, Bank loans

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Equilibrium "anomalies"

Article Abstract:

The article examines the single beta capital asset pricing model as an explanation for empirical anomalies. Discussion includes loadings on portfolios, such as small minus big market capitalization portfolios and high minus low book-to-market portfolios.

Pricing Policy, Models, Pricing, Comparative analysis, Econometric models, Product price

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Empirical evidence on capital investment, growth options, and security returns

Article Abstract:

A study involving the growth in capital expenditures and its relationship with returns to portfolios, and the cross section of future security returns, is presented.

United States, Capital expenditures

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