Lu Ruichang:Deadly Disease, Fear, and Ostracism in the Credit Market


Time2023. 12. 1Friday10:30-12: 00

VenueBuilding 2, Room 220, Songjiang Campus

SpeakerLu Ruichang, Finance at Guanghua School of Management, Peking University, Associate Professor

HostLiu Chunbo  Associate Professor


Utilizing the 2014 Ebola outbreak in the United States, this paper examines the impact of fear on racial disparities in the mortgage market. Even though the risk of infection in the U.S. was low, the fear associated with the outbreak led to an amplified disparity experienced by Black mortgage applicants. Our study employs the geographical distribution of the four diagnosed Ebola cases in the U.S. and algorithm-based lending as a control group to establish a clear association between heightened fear and an increased racial disparity in mortgage approval rates between Black and non-Black applicants. Furthermore, our analysis exposes that this disparity in access to the credit market is intramarginal. Finally, we demonstrate a decline in denial rates after the initial surge, suggesting that loan officers consciously counteract their biases once they are aware of the low risk of infection. Overall, our findings underscore the profound impact of fear as a catalyst for disparity in the mortgage market.

Guest Speaker

Lu Ruichang, Associate Professor of Finance at Guanghua School of Management, Peking University. Graduated from the Department of Finance at the National University of Singapore Business School with a PhD in Finance. The research field is empirical corporate finance, with a specific focus on bank loan pricing and financial institutions. Has won the Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research and the Seventh Annual Conference on Asia Pacific Financial Markets (CAFM) Best Paper Award from the WFA in 2014. His articles have been published in foreign journals such as Management Science, Journal of Financial and Quantitative Analysis, Journal of Banking&Finance, Journal of Accounting and Public Policy, Economics Letters, as well as Chinese journals such as Financial Research, China Accounting Review, and Financial Quarterly.

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