Summer 1979, Vol 4, No 1

Abstract: Most of the available studies on the redlining issue have been undertaken by local community and public interest groups that begin with an expressed bias against institutional lenders. In addition, they usually ignore demand considerations, risk factors, and the interaction of the variables. This article applies path analysis, a methodology borrowed from behavioral sciences, to demonstrate that a more meaningful analysis of currently available data can be readily accomplished. Using data from a medium-sized SMSA, this research turns up evidence that could be used to refute claims of mortgage lending discrimination on the part of depository financial institutions on the basis of neighborhood quality or racial composition.