The Allocation of Home Credit: Market versus Nonmarket Factors

This paper explores the predictive power of race and geographic location in the allocation of home credit by private sector lending institutions in Dallas County, Texas, the analysis first presents a series of regression models which attempt to estimate a “market” distribution. Residuals from these models indicate that even after market indicators are introduced into the analysis, there remains a significant association between race, geographic location and investment. This association is particularly strong in those areas of the county with levels of investment much higher than predicted by the market models.