The practical applications of artificial intelligence are expanding into various elements of society, leading to a growing interest in the potential biases of such algorithms. Facial analysis, one application of artificial intelligence, is increasingly used in real-word situations. For example,...

Will the revolution in digital and information technologies make us obsolete? Will jobs be lost and never replaced? Will wages drop to intolerable levels? History and economic theory and evidence suggest that in the long term, such fears are misplaced. However, in the short and medium term,...

Appraisal bias has emerged as one of the most controversial issues in the mortgage industry. Several recent studies have documented systematic biases in traditional appraisals that result in lower values for Black and Hispanic homebuyers and neighborhoods (Rothwell and Perry, 2019). This in part...

We investigate the performance of loans funded by the automated system and manually by clicking using data from a peer-to-peer lending platform in China. We find that manually invested loans default more frequently than automatically invested loans. When manually picking the loans, lenders are...

Using a randomized experiment in the auto lending industry, we provide causal evidence of higher loan profitability and lower default rates with algorithmic machine underwriting, relative to human underwriting. We find that machine-underwritten loans generate 10.2% higher profit than...