2002
Abstract:
National data on the disposition of applications for
home mortgages reveal wide disparities in
rejection rates among racial and ethnic groups.
Some have advanced race-based cultural affinity as a
possible explanation for these disparities. The literature has
developed two related, yet distinct, versions of cultural
affinity. In the taste-based form of the theory, lenders have
a preference, or “taste,” for members of their group. In
the common bond formulation, the affinity allows lenders
to better assess the quality of members of their group.
