【 Webinar Series - Innovation, Productivity, and Challenges in the Digital Era: Asia and Beyond 】

Reducing Racial Disparities in Consumer Credit: Evidence from Anonymous Loan Applications

Date: 5 Apr 2023 (Wed)

Time: 10:00 am – 11:10am (Hong Kong/Singapore Time, UTC+8)

Abstract: Using a unique experiment of anonymizing online loan applications, the authors find that anonymous loan applications reduce racial disparities in access to credit. With names on applications, ethnic minority applicants are 10.6% less likely to receive online loan offers than otherwise identical ethnic majority applicants; anonymizing applications eliminates such disparities. Anonymization merely delays revealing race until applicants visit the lender in person for the required identity verification before loan origination. Yet, racial disparities in loan origination also decrease. The authors do not find significant racial gaps in loan performance before or after anonymization. Furthermore, accurate statistical discrimination is unlikely to explain their results.

Speaker: 

Tianyue RUAN, Assistant Professor of Finance, NUS Business School, National University of Singapore

Co-author: 

Poorya KABIR, Assistant Professor of Finance, NUS Business School, National University of Singapore

Discussant: 

Pulak GHOSH, IIMB Chair of Excellence and Professor of Decision Sciences, Indian Institute of Management Bangalore

Event Website: https://abfer.org/events/abfer-events/webinar-series/346:ws-ipc-20230405

About the Webinar

Artificial Intelligence (AI), Big Data, multilevel neural nets, the Internet of Things (IoT) and other digital technologies are transforming the world. They are strengthening innovation and productivity and innovation by rendering the future more predictable and reshaping individual, business, social, and government behavior. Asia leads the world in some of these endeavors, e.g., digital platforms. The OECD lists 40% of big new digital technologies as Asian. Almost half of global digital platform business-to-consumer revenues are Asian, versus only 22% from the U.S. and 12% from the Eurozone. Profound new policy challenges arising, in consequence, include: shifting skills demanded in labor markets and “digital divide” inequality, (ii) AI expanding financial inclusion or encoding inequality, expanding or obscuring accountability, increasing transparency or obscuring amoral decision-making, and (iii) digital privacy, unsanctionable on-line libel, misinformation, manipulation, and propaganda. The ABFER, therefore, plans a monthly e-seminar series spotlighting important new research, particularly the Asia-pacific related, into these issues and providing “state-of-the-art” overviews by prominent scholars. We hope policy makers and practitioners will find the e-seminars helpful and will alert researchers to issues needing attention.

Collaborating Organizers

ABFER, The Chinese University of Hong Kong-Zhejiang University Joint Research Center for Digital Economy, The Chinese University of Hong Kong (CUHK) Department of Economics and Center for Internet Development and Governance, Fanhai International School of Finance (FISF), Fudan University, National Tsing Hua University College of Technology Management and Tsinghua University School of Economics and Management (Tsinghua SEM)