Another Appraiser Bias Academic Paper

[Non Sequitur]

Well, I guess it isn't over. Published in Review of Finance yesterday.

Abstract:
Do Appraiser and Borrower Race Affect Mortgage Collateral Valuation?

We examine racial bias in property appraisals using a national sample of refinanced mortgages from 2000 to 2007. Our data allow us to observe the race of the appraiser and homeowner in a setting where the appraiser’s valuation conveys critical information to the lender. After conditioning on a rich set of controls and individual appraiser fixed effects, we observe lower appraised values (relative to benchmark valuation estimates) for Black owned homes. Hispanic and Asian owned homes are also under appraised, but to a lesser extent. We find no evidence that minority valuation discounts lessen when the homeowner and appraiser share the same race, suggesting implicit bias is not solely attributable to White appraisers. We also show that minority valuation discounts are not driven by a small subset of appraisers; rather, they are widespread.

https://academic.oup.com/rof/article/doi/10.1093/rof/rfaf046/8316104

A biiiiiiiig flaw I see from the get-go; Basing a current paper on any data pre-2008 financial crises screams "I know nuthin' about real estate."

 

[Essexfenwick]

Well, I guess it isn't over. Published in Review of Finance yesterday.

Abstract:
Do Appraiser and Borrower Race Affect Mortgage Collateral Valuation?

We examine racial bias in property appraisals using a national sample of refinanced mortgages from 2000 to 2007. Our data allow us to observe the race of the appraiser and homeowner in a setting where the appraiser’s valuation conveys critical information to the lender. After conditioning on a rich set of controls and individual appraiser fixed effects, we observe lower appraised values (relative to benchmark valuation estimates) for Black owned homes. Hispanic and Asian owned homes are also under appraised, but to a lesser extent. We find no evidence that minority valuation discounts lessen when the homeowner and appraiser share the same race, suggesting implicit bias is not solely attributable to White appraisers. We also show that minority valuation discounts are not driven by a small subset of appraisers; rather, they are widespread.

https://academic.oup.com/rof/article/doi/10.1093/rof/rfaf046/8316104

A biiiiiiiig flaw I see from the get-go; Basing a current paper on any data pre-2008 financial crises screams "I know nuthin' about real estate."

Who's in charge of levels of skin color, nose/lip/eye width, and hair texture to categorize people for the study?

 

[Surf Cat]

Our data allow us to observe the race of the appraiser and homeowner in a setting where the appraiser’s valuation conveys critical information to the lender.

How'd they get that?

 

[Non Sequitur]

How'd they get that?

That's a super-secret, like the insta-toot's financials.

 

[TerryRohrer]

How'd they get that?

I bet they won't say, or show it. Modeled after the GSE approach to narrative creation/advancement.

 

[Fernando]

I can't comment on the study. I don't do that many black owned home appraisals (maybe one every five years).

 

[djd09]

60 pages...wtf

 

[alebrewer]

Is anybody but me biased against folks with really long ear and nose hairs? It's like... 'ma'am - they do make trimmers for that stuff now...'

 

[Fernando]

Is anybody but me biased against folks with really long ear and nose hairs? It's like... 'ma'am - they do make trimmers for that stuff now...'

There's a saying that people with big ears or was that earlobes are considered intelligent. Next time notice that.
As for nose hairs, is it just me but they seem to be more apparent when I get older.

 

[alebrewer]

There's a saying that people with big ears or was that earlobes are considered intelligent. Next time notice that.

sorry - couldn't hear you. My ears got in the way.