Small business finance in two Chicago minority neighborhoods

The authors use survey data to measure the use of formal and informal sources of financing by owners of small businesses in two ethnic neighborhoods. The authors find substantial differences across ethnic groups in the amount of start-up funding obtained and in the use of trade credit.Small business ; Chicago (Ill.)

The Importance of Check-Cashing Businesses to the Unbanked: Racial/Ethnic Differences

The roughly 9.1% of all U.S. families that are without some type of transaction account (unbanked) are disproportionately represented among minorities. The unbanked often must rely on alternative ways to carry out basic financial transactions such as cashing payroll checks and paying bills. This study analyzes unique survey data and finds that a consumer's decision to patronize check-cashing businesses is jointly made with the decision to be unbanked. For the unbanked, these businesses are an important source of financial services. Attributes that contribute to these decisions, however, vary with the racial/ethnic group. Latent preference effects are also observed to influence this joint decision for blacks and Hispanics. These findings may explain in part why the provisions of the Debt Collection Improvement Act (DCIA) of 1996 have not been more successful in bringing unbanked federal benefits recipients into the financial mainstream. Consumer participation in mainstream financial markets can improve their ability to build assets and create wealth, can protect them from theft and discriminatory, predatory, or otherwise unsavory lending practices, and may promote economic stability and vitality in the communities where they reside. By more fully understanding consumers' financial decisions, policies can be better directed to improve the effectiveness of legislation such as the DCIA of 1996 in encouraging mainstream financial market participation. © 2006 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Tenure Choice with Location Selection: The Case of Hispanic Neighborhoods in Chicago

A notable feature of immigration into the United States is the high degree of spatial concentration of different immigrant groups. This article asks the question whether residing in areas with a large proportion of a coethnic group influence the decision to own a home for Hispanics in the Chicago metropolitan area. The results show that Hispanics choose to live in Hispanic enclaves based on relatively homogeneous characteristics, such as recent migration, less English language fluency, and lower income. More years in the United States, higher education attainment, and English language fluency remain strong predictors of homeownership. Individuals are less likely to be homeowners in communities with a larger coethnic concentration, foreign-born residents, or lower-income families. (JEL "C35", "J1", "R12") Copyright 2004 Western Economic Association International.

Fringe Benefits and the Earnings Equation: A Test of the Consistency Hypothesis

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Institutions of Higher Education as Multi-product Firms: Economies of Scale and Scope.

A multiple-output cost function is estimated for institutions of higher education in the United States, employing data for 1981-82. The authors flexible fixed cost quadratic function includes three outputs--undergraduate teaching, graduate teaching, and research grants--and one input price--average faculty salaries. Results indicate the existence of scope economies (at least up to a point) for both public and private institutions of higher education. Ray economies of scale are more pronounced in the private sector and product-specific economies of scale are observed only in the public sector for research and graduate teaching. Copyright 1989 by MIT Press.