Tuesday, January 16, 2007

Redlining Redux

Maybe this would have been a better post for MLK day. I was reading the October 2006 issue of the Milken Institute Review. There is an article in there (page 90) oddly titled Entrepreneurship by Barth, Yago and Zeidman which covers a hodgepodge of issues, but has a table of how MSA's compare in terms of something they call Loan Bias defined as "one minus the percentage of loans going to low income borrowers divided by the percentage of the population with low income". By my thinking that means low numbers are good in that it means low income borrowers are getting a proportional number of loans, and high numbers are bad. I really only noticed because Pittsburgh ranks pretty bad. Their numbers in order are:

Tampa 0.96
San Diego 0.92
Pittsburgh 0.92
Seattle 0.89
Atlanta 0.86
Orlando 0.81
Dallas 0.80
Riverside/SB 0.80
Minneapolis 0.79
Orange Co,CA 0.79
Kansas City 0.79
St. Louis 0.76
Sacramento 0.73
San Jose 0.65
Miama 0.64
Fort Lauderdale 0.63
Los Angeles 0.58
Phoenix 0.53
Oakland 0.52
San Francisco 0.41


Anonymous Anonymous said...

You are correct in your interpretation of the statistic: While 26% of Pittsburgh's population is low-income, only 2% of business loans are made in low-income communities. The stats include only loans made by banks of more than $250M in assets.

Thursday, January 18, 2007 9:40:00 AM  

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