Selected Working Papers

1. Bank Competition and Entrepreneurial Gaps: Evidence from Bank Deregulation

Conditionally Accepted, Journal of Financial and Quantitative Analysis 

I analyze the effects of bank competition on gender and racial gaps in entrepreneurship. By leveraging interstate bank deregulation from 1994 to 2021, I find that stronger bank competition increases the quantity and quality of banking services offered to minority borrowers. Developing a novel measure of discrimination using narrative information in the complaints filed with the Consumer Financial Protection Bureau, I demonstrate that bank competition reduces discrimination, alleviating the financial constraints of female and minority entrepreneurs. Stronger bank competition also reduces gender and racial gaps in firm performance and business equity accumulation, promoting wealth equality and fostering equitable economic growth.


2. Does the Disclosure of Consumer Complaints Reduce Racial Disparities in the Mortgage Lending Market?

The Consumer Financial Protection Bureau (CFPB) publicly disclosed consumer complaint narratives in 2015. Utilizing a difference-in-differences design, I find that, following disclosure, CFPB-supervised banks whose complaint narratives are disclosed are less prone to discriminate against minority borrowers in the mortgage lending market. This reduces racial disparities in interest rates, default rates, and rejection rates. The disclosure saves minority borrowers $102 million in interest payments and aids over 14,000 minority households in securing loans annually, thereby narrowing the racial gap in homeownership. Stakeholders including consumers, peer banks, and stock market investors facilitate the disclosure’s effects on reducing discrimination.


3. Five Facts about Bequest Motives (with Rawley Heimer)

Rising differences in generational wealth and the economic effects of inheritances make it increasingly important to understand individuals' bequest motives. We document five novel empirical facts about individuals' preferences and expectations toward bequests using survey data spanning three decades. (1) Households with heirs exhibit stronger bequest preferences. (2) Bequest motives follow a U-shaped pattern over the life cycle. (3) The perceived importance of bequests rises sharply among the top two deciles of the wealth distribution. (4) Stock owners, particularly those who experience high market returns, report stronger bequest preferences. (5) Individuals systematically overestimate their bequests' likelihood and size. These stylized facts provide new benchmarks for evaluating economic models and suggest that alternatives to the static treatment of bequest motives may better reflect observed behavior. Finally, we examine the implications of these findings for wealth accumulation and portfolio choice within a canonical life-cycle model with precautionary savings.


4. Shedding Light on Bias: Consumer Complaint Disclosure and Racial Equity in Financial Services (with Ningzhe Zhou) 

We investigate the effect of the Consumer Financial Protection Bureau's 2015 disclosure of complaint narratives on reducing racial disparities in financial services. Employing a triple-differences approach that compares the performance of affected and unaffected financial institutions across communities with varying racial compositions, we find that post-disclosure, minority communities experience welfare enhancements. These include higher savings interest rates (amounting to over $50 million annually), reduced maintenance fees, and lower interest rates on auto loans and credit cards. The research emphasizes the broad impact of service quality disclosure in mitigating racial disparities in savings and lending markets. 


5. Policy Uncertainty and Household Credit Access: Evidence from Peer-to-Peer Crowdfunding (with Bibo Liu and Xuan Tian)

This paper studies how policy uncertainty affects household credit access. Using crowdfunding data from a major peer-to-peer (P2P) crowdfunding platform, Prosper.com, and a news-based policy uncertainty index developed by Baker, Bloom, and Davis (2016), we find that policy uncertainty negatively affects households’ access to small loans. Using an instrument variable based on partisan conflicts and a difference-in-differences analysis relying on plausibly exogenous variation in policy uncertainty generated by gubernatorial elections, we show that the relation is likely causal. Investors’ increased caution on deal selection and enhanced value of the “wait-and-see” option appear to be two plausible underlying channels through which policy uncertainty affects P2P crowdfunding. Further evidence suggests that policy uncertainty decreases households’ incentives to borrow at the aggregate level, and increases loan interest rates and default probabilities.