Studies of bias in the consumer credit markets traditionally dwells on disparities in access to credit. However, the possibility of bias persists even when access to credit exists. Assessments of secondary or tertiary bias require researchers to explore and develop new dependent variables and models. In Racial Dispersion in Consumer Credit Interest Rates, Wendy Edelberg (US Federal Reserve) considers whether race influences interest rates. More specifically, "the primary goal of this empirical analysis is to estimate the role of race in interest rate determination after accounting for the financial costs of issuing debt." An excerpted abstract follows.
"In this paper, I examine disparities in a variety of consumer loan interest rates using a reduced-form framework. I find that interest rates on loans issued before the 1995 show a statistically significant degree of unexplained racial heterogeneity even after controlling for the financial costs of issuing debt. However, racial dispersion in rates falls off for loans originated after 1995. The unexplainable racial disparity in consumer loan rates issued before 1995 implies that in this earlier period minorities faced unaccountably higher interest-rate premiums on the order of - in two examples - 20 basis points for first mortgages and 80 basis points for automobile loans. Overall, evidence of unexplainable racial dispersion in interest rates is more robust among homeowners than renters."