Economic and Regional Determinants of the Location of Payday Lenders and Banking Institutions in Mississippi: Reconsidering the Role of Race and Other Factors in Firm Location

Wheatley, W. Parker

doi:10.52324/001c.8160

Cited by 14 publications

(8 citation statements)

References 15 publications

(8 reference statements)

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“…That claim is consistent with the finding that low-income individuals are more likely to be underbanked or unbanked (FDIC, 2014), and that payday lending offices have a small, negative correlation with bank and thrift office density (Stegman and Faris, 2003). However, Wheatley (2010) finds the number of banks per zip code tabulation areas or county in the state of Mississippi has no significant relationship to poverty rates.…”

Section: Introductionsupporting

confidence: 80%

“…Although less than 10 percent of the unbanked claimed the reason was "inconvenient [bank] hours or locations" (FDIC, 2014, p. 7), it would not be surprising to encounter a similar race/ethnicity distribution for bank deserts. Consistent with the high unbanked figure for African Americans, Wheatley (2010) found the number of banks per zip code tabulation area in Mississippi was negatively and significantly correlated with the proportion of African Americans. Using census block…”

Section: Introductionsupporting

confidence: 56%

“…in the current data, only 0.03 percent of inner city census tracts would be classified as deserts). It is also arguably stronger than density measures within a clearly bounded area (Ergungor, 2010;Hegerty, 2016;Wheatley, 2010), each of which capture low density but not clearly defined geographic spaces without banking services. Hegerty (2016) uses a composite measure of distance to various bank and credit union offices to identify bank "cold spots" with few offices, and "hot spots" with clustering.…”

Section: Bank Desertsmentioning

confidence: 99%

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Bank deserts in the USA and the Great Recession: geography and demographics

Kashian

Tao

Drago

2018

JES

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Purpose The purpose of this paper is to identify bank deserts in the USA in 2009 and 2015, separately for inner city, suburban, and rural areas. It also identifies correlations between bank deserts, population characteristics, market competition, and payday lending restrictions, both cross-sectionally and over time. Design/methodology/approach FDIC data on bank office locations are used to identify bank deserts, defined as the 5 percent of census tracts with the greatest distance from the centroid to the nearest office. Those data are matched to both American Community Survey data to identify population characteristics, to a list of states with payday lending prohibitions, and to levels of market competition. An alternative measure of bank deserts corrects for population density. Geography is analyzed, mean characteristics compared, and random effects regressions capture static and dynamic correlates. Findings Population density explains approximately half of bank distance variance. Bank deserts appear more often in southern and western states, and expanded significantly in inner cities while contracting in rural areas. Regression results suggest that African Americans were overall and increasingly likely to live in bank deserts and Native Americans were overall more likely to live in rural bank deserts. Rural poverty is linked to bank deserts, and the effects of competition are complex. Practical implications The space for policy intervention exists in African American inner cities and Native American rural communities. Originality/value The relative measure of bank deserts is novel, as are dynamic estimates and random effects analysis of correlates.

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Section: Introductionsupporting

confidence: 80%

Section: Introductionsupporting

confidence: 56%

Section: Bank Desertsmentioning

confidence: 99%

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Bank deserts in the USA and the Great Recession: geography and demographics

Kashian

Tao

Drago

2018

JES

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“…What appears to be missing from the current body of literature is the lived experiences of the employees and their perception of the services offered. Fourth, a lack of quantitative research on payday lending in Mississippi exists (Wheatley, 2010) and there is no known qualitative research on payday loan users or employees from Mississippi, a state with a heavy payday lending presence as described below.…”

Section: Introductionmentioning

confidence: 99%

Lived Experiences with Payday Loans: African American Single Mothers and Employees

Riley¹,

Green²,

Zuiker

2022

Family & Consum Sci Res J

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Payday loans are disproportionately used by African Americans and women including single mothers. Little empirical research exists incorporating data from payday loan employees. This exploratory study used a phenomenological approach and in‐depth interviews to examine the lived experiences of two groups: African American single mothers who used payday loans and former payday loan employees who extended and collected on payday loans. The interviews resulted in four themes from the single mothers' experiences including “right decision at the time” and “it's addictive” and five themes from the former employees including “help the customer come back” and “relating to the customers.”

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“…Chen et al (2014), on the other hand, find no evidence of any "spatial void" in their study of U.S counties. Racial disparities are an important covariate with the lack of banking services (Wheatley, 2010;Cover et al, 2011) as are income and socioeconomic variables such as housing tenure (Hegerty, 2016;Dunham et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

Bank Density, Population Density, and Economic Deprivation Across the United States

Hegerty¹

2021

Preprint

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Recent research on the geographic locations of bank branches in the United States has identified thresholds below which a given area can be considered to be a "banking desert." Thus far, most analyses of the country as a whole have tended to focus on minimum distances from geographic areas to the nearest bank, while a recent density-based analysis focused only on the city of Chicago. As such, there is not yet a nationwide study of bank densities for the entire United States. This study calculates banks per square mile for U.S. Census tracts over ten different ranges of population density. One main finding is that bank density is sensitive to the measurement radius used (for example, density in urban areas can be calculated as the number of banks within two miles, while some rural areas require a 20-mile radius). This study then compiles a set of lower 5-and 10-percent thresholds that might be used to identify "banking deserts" in various urban, suburban, and rural areas; these largely conform to the findings of previous analyses. Finally, adjusting for population density using regression residuals, this paper examines whether an index of economic deprivation is significantly higher in the five percent of "desert" tracts than in the remaining 95 percent. The differences are largest-and highly significant-in the densest tracts in large urban areas.

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Economic and Regional Determinants of the Location of Payday Lenders and Banking Institutions in Mississippi: Reconsidering the Role of Race and Other Factors in Firm Location

Cited by 14 publications

References 15 publications

Bank deserts in the USA and the Great Recession: geography and demographics

Bank deserts in the USA and the Great Recession: geography and demographics

Lived Experiences with Payday Loans: African American Single Mothers and Employees

Bank Density, Population Density, and Economic Deprivation Across the United States

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