Hispanics and Finance
Paper Session
Sunday, Jan. 9, 2022 12:15 PM - 2:15 PM (EST)
- Chair: Jose Manuel Fernandez, University of Louisville
Neuroeconomics for Development: Eye-Tracking to Understand Migrant Remittances
Abstract
Remittances, i.e., money sent by migrants to family and friends, are a key pillar of economic development. Organizations such as the International Fund for Agricultural Development and the World Bank have thus argued for increased transparency and reduced transaction fees via remittance-comparison platforms, i.e., sites like kayak.com but for sending money. Using data from a sample of 383 Central American migrants, this study assesses to what extent (1) information provided through such platforms impacts remittance choices, e.g., by breaking habits; (2) information affects the alignment between choices and stated preferences, potentially impacting welfare; and (3) migrants' visual attention (measured through eye-tracking) moderates the relationship between choices, information, and possibly, welfare. A pre-analysis plan (PAP) for thisstudy was registered on September 8, 2020 (https://bit.ly/3d3c4M3). This version of the paper presents preliminary findings to date. First, information provided via comparison sites seems to impact decision-making. Second, the direction of such effect depends on the nature of additional information, i.e., whether migrants are being informed about the delivery speed versus prior customer reviews. Third, visual attention
data appears to be consistent with choice data.
COVID-19 Pandemic and Its Impact on Minority-Owned Banks
Abstract
Minority owned banks perform an important social function by providing financial services to historically underserved communities, minority small businesses, minority community organizations, and local non-profit organizations. Such communities have diverse, racial, ethnic and immigrant backgrounds and a clientele characterized largely of low-income, high poverty, lower education, higher unemployment population and with higher credit and liquidity constraints.Minority-owned business have been disproportionately hit by the pandemic. This paper evaluates the extent to which minority-owned financial institutions have been affected. Using a matched sample of minority and non-minority owned banks, we employ a difference-in-difference framework to examine the effect of COVID-19 on various bank performance metrics.
We do not find significant evidence of worsening performance of minority-owned banks. In fact, in some instances, minority banks fare better. We find leveraged capital (tier-1 capital ratio, a measure of financial strength) of minority owned banks significantly increased in the post pandemic period. Disaggregating the impact on COVID on minority owned banks by race, we find Hispanic, Native American, and Asian banks show a significant increase in leverage capital. At the same time, Asian banks witness a significant decline in profits (ROA) compared to nonminority owned banks. Asian banks overhead expenses relative to their net operating revenue also went up with the onset of the pandemic worsening their cost efficiency.
Mind the Gap between Older Hispanics and Whites in the United States: Insights from the Retirement Knowledge Scale (RKS)
Abstract
The lack of financial planning and saving for retirement among U.S. adults is a significant and pressing policy concern. According to the Report on the Economic Wellbeing of U.S. Households in 2019 by the Federal Reserve, 26% of non-retired U.S. adults reported no retirement savings. Furthermore, this report noted significant variation between racial and ethnic groups vis-a-vis retirement preparedness. While 20% of working-age white households do not have any retirement savings, the rates are 36% and 39% for Black and Hispanic households, respectively (Federal Reserve, 2020). Our study has two aims: 1) to evaluate the psychometric properties of the RKS, and 2) to identify the determinants of the racial, ethnic and gender gaps in retirement knowledge and preparedness. To conduct this study, we will use data from 1500 individuals 55 or older collected in the HRS. To analyze the racial, ethnic, and gender gap on retirement knowledge, we will use a regression approach, with a Blinder-Oaxaca (BO) decomposition, where we will consider individual, neighborhood and institutional characteristics. We will evaluate which of these factors seem to be contributing the most to the gap on retirement knowledge by estimating our model and adding different sets of variables at the time.Discussant(s)
André Varella Mollick
,
University of Texas-Rio Grande Valley
Joy Buchanan
,
Samford University
Raffi E. García
,
Rensselaer Polytechnic Institute
Monica Garcia-Perez
,
St. Cloud State University
JEL Classifications
- G5 - Household Finance
- G2 - Financial Institutions and Services