MORTGAGE LENDING IN BOSTON - A RECONSIDERATION OF THE EVIDENCE

Is there statistical evidence of racial discrimination in home mortgag e markets? The Boston Fed recently addressed this concern head-on, by collecting all available data from loan applications in Boston. They f ind that the extent of discrimination is reduced after one accounts fo r all of the confounding variables measured in these applications, but that it remains statistically significant. However; their strong conc lusions are unwarranted due to the use of invalid statistical methods. Correctly evaluated, their data provide no significant evidence of ra cial discrimination in mortgage markets.