VGSF - WU Vienna - LC

Daniel Paravisini, London School of Economics

online via Microsoft Teams Live Events 10:00 - 11:00

Organizer VGSF

As part of the ser­ies of the "Fin­ance Re­search Sem­inar", VGSF wel­comes Daniel Para­v­isini from the Lon­don School of Eco­nom­ics to present his re­search pa­per.
Per­sonal Webpage

At short notice the sem­inar has to be res­ched­uled. It will take place via Teams from 10:00 am to 11:00 am!

Pa­per

Meas­ur­ing Bias in Con­sumer Lend­ing

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 where loan ex­am­iners max­im­ize a short-term out­come, not long-term profits, lead­ing to bias against il­li­quid ap­plic­ants at the mar­gin of loan de­cisions. 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.



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