Regulatory arbitrage or random errors? Implications of race prediction algorithms in fair lending analysis
本摘要源自该文的 NBER 工作论文版（2023），正式发表版可能有调整。
When race is not directly observed, regulators and analysts commonly predict it using algorithms based on last name and address.In small business lending-where regulators assess fair lending law compliance using the Bayesian Improved Surname Geocoding (BISG) algorithm-we document large prediction errors among Black Americans.The errors bias measured racial disparities in loan approval rates downward by 43%, with greater bias for traditional vs. fintech lenders.Regulation using self-identified race would increase lending to Black borrowers, but also shift lending toward affluent areas because errors correlate with socioeconomics.Overall, using race proxies in policymaking and research presents challenges.