Numeracy and the Quality of On-the-Job Decisions: Evidence from Loan Officers
Journal
Economic Inquiry
Type
journal article
Date Issued
2020-04
Author(s)
Abstract
We examine how the numeracy level of employees influences the quality of their on-the-job decisions. Based on an administrative dataset of a retail bank we relate the performance of loan officers in a standardized math test to the accuracy of their credit assessments of small business borrowers. We find that loan officers with a high level of numeracy are more accurate in assessing the credit risk of borrowers. The effect is most pronounced during the pre-crisis credit boom period when it is arguably more difficult to pick out risky borrowers.
Language
English
Keywords
behavioral banking
numeracy
loan officers
screening
HSG Classification
contribution to scientific community
HSG Profile Area
SOF - System-wide Risk in the Financial System
Refereed
Yes
Publisher
Wiley Online Library
Volume
Volume 58
Number
Issue 2
Start page
998
End page
1022
Pages
25
Subject(s)
Contact Email Address
martin.brown@unisg.ch
Eprints ID
251196
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Numeracy and on the Quality of on-the-Job Decisions_MB_KK_TS.pdf
Size
441.67 KB
Format
Adobe PDF
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