Numeracy and the Quality of On-the-Job Decisions: Evidence from Loan Officers

Item Type	Journal paper
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.
Authors	Brown, Martin; Kirschenmann, Karolin & Spycher, Thomas
Journal or Publication Title	Economic Inquiry
Language	English
Keywords	behavioral banking, numeracy, loan officers, screening
Subjects	business studies economics finance
HSG Classification	contribution to scientific community
HSG Profile Area	SOF - System-wide Risk in the Financial System
Refereed	Yes
Date	April 2020
Publisher	Wiley Online Library
Volume	Volume 58
Number	Issue 2
Page Range	998-1022
Number of Pages	25
Publisher DOI	https://doi.org/10.1111/ecin.12873
Official URL	https://onlinelibrary.wiley.com/doi/full/10.1111/e...
Contact Email Address	martin.brown@unisg.ch
Depositing User	Beatrix Kobelt-Glock
Date Deposited	10 Jul 2017 10:35
Last Modified	20 Jul 2022 17:31
URI:	https://www.alexandria.unisg.ch/publications/251196

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Brown, Martin; Kirschenmann, Karolin & Spycher, Thomas (2020) Numeracy and the Quality of On-the-Job Decisions: Evidence from Loan Officers. Economic Inquiry, Volume 58 (Issue 2). 998-1022.

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https://www.alexandria.unisg.ch/id/eprint/251196

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