Agenda > Tous les événements

Laurent Weill

(EM Strasbourg Business School, University of Strasbourg )

Do Algorithms Discriminate Against African Americans in Lending?

(Jérémie Bertrand, Laurent Weill)

We investigate whether discrimination against African Americans occurs in peer-to-peer lending. We consider data from a large peer-to-peer lender that uses algorithms and no face-to-face interview to decide loan approval and conditions. Using data from 3.6 million loan applications and 817,000 granted loans for 2016 and 2017, we perform regressions of loan acceptance and loan conditions on the percentage of African Americans by 3-digit zip area. We observe evidence of discrimination in peer-to-peer lending. African Americans have a greater chance to have their loan applications rejected, pay higher loan rates, and obtain loans with shorter maturity. Discrimination is more pronounced after the election of Trump.