Enrichetta Ravina" />

Take Action

Home | Faculty & Research Overview | Research

Research Details

"Love & Loans. The Effect of Beauty and Personal Characteristics in Credit Markets"

Abstract

I find that beauty, race, age, and personal characteristics affect lenders decisions, once credit and employment history, homeownership, and other hard financial information are accounted for. Beautiful borrowers are 11.7% more likely to get a loan, pay similar interest rates as average looking borrower with the same credentials, but default more often. Black borrowers are significantly less likely to get a loan (-16.9%), pay similar rates as White borrowers, and they are more likely to default. These findings are consistent with taste-based discrimination of the unattractive, and statistical discrimination of black borrowers. However, minority borrowers with more lenders from areas of high racial prejudice face lower probability of getting funds and higher interest rates. More nuanced models of lender specialization could also explain the results.

Type

Working Paper

Author(s)

Enrichetta Ravina

Date Published

2019

Citations

Ravina, Enrichetta. 2019. "Love & Loans. The Effect of Beauty and Personal Characteristics in Credit Markets".

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more

Take Action