Working Paper: CEPR ID: DP3745
Authors: Robert Garybobo; Sophie Larribeau
Abstract: We specify several variants of a structural econometric model explaining mortgage interest rates and loan sizes simultaneously. The models are estimated by simultaneous equation methods with a sample of loan files originated from a French mortgage lender. They yield estimates of the interest-rate elasticity of the demand for housing. Different occupational status groups happen to have different values of structural preference parameters. We show how these differences translate into differential treatment of socio-economic groups by the banker.
Keywords: discrimination; market power; mortgage lending
JEL Codes: D40; G21; L13; R21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| occupational status (J28) | interest rate elasticity of demand for housing (R21) |
| executives (M12) | interest rate elasticity of demand for housing (R21) |
| intermediate professions (J44) | interest rate elasticity of demand for housing (R21) |
| white-collar workers (J29) | interest rate elasticity of demand for housing (R21) |
| blue-collar workers (J59) | interest rate elasticity of demand for housing (R21) |
| interest rate elasticity of demand for housing (R21) | discriminatory pricing practices (L42) |
| downpayment ratio (R21) | interest rates (E43) |
| occupational status (J28) | interest rates (E43) |