An empirical analysis of differences in Black and White asset and liability combinations

Authors

  • Yaw A. Badu Department of Economics and Finance, Virginia State University, Petersburg, VA 23806, USA
  • Kenneth N. Daniels Department of Finance, Virginia Commonwealth University, Richmond, VA 23284-4000, USA
  • Daniel P. Salandro Department of Finance, Virginia Commonwealth University, Richmond, VA 23284-4000, USA

DOI:

https://doi.org/10.1016/S1057-0810(99)00039-6

Keywords:

Minority, Wealth distribution, Household behavior

Abstract

This study analyzes data from the 1992 Survey of Consumer Finances and finds significant differences in asset and liability combinations between Black and White households. In addition, White households are identified as having significantly greater net worth and financial assets relative to Black households. We are unable to show that the net worth of Black households is constrained by barriers in financial markets. Our study investigates how this difference in net worth could engender different financing decisions. We find that Black households are significantly more risk averse in their choice of assets. Further, we find that Black households typically pay higher rates for several types of credit instruments, even though they self identify as conducting significantly more extensive searches in the financial markets. © 2000 Elsevier Science Inc. All rights reserved.

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Published

1999-09-30

How to Cite

Badu, Y. A., Daniels, K. N., & Salandro, D. P. (1999). An empirical analysis of differences in Black and White asset and liability combinations. Financial Services Review: The Journal of Individual Financial Management, 8(3), 129–147. https://doi.org/10.1016/S1057-0810(99)00039-6

Issue

Vol. 8 No. 3 (1999): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1999 JAI Press Inc.

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