Credit rationing, deregulation and race in mortgage lending in the United States: 1960-90

This paper examines discrimination in mortgage lending in teh United States over three decades in 1960 to 1990. We focus on whether deregulation, increased Federal oversight and enhanced competition reduce discrimination as becker's theory suggests (Becker, 1971). We find that discrimination is evident over the three decades taken together, is prevalent from 1960 to 1980, but is absent in the data from 1980 to 1990. This finding strongly supports Becker' hypothesis. Preferences for discrimination appear to be offset by the higher costs fo engaging in them after 1980.