Bad Credit, Bad Driver

Sunday, July 29th, 2007

In Bad Credit, Bad Driver, Alex Tabarrok looks at a recent summary, by Luke Froeb at Management R&D, of a recent FTC study:

Some states ban the use of credit scores to price auto insurance in part because African-Americans and Hispanics tend to have lower (worse) credit scores and thus pay higher auto insurance rates. The brute facts, however, are that credit scores are good predictors of auto claims.

Dan Klein also weighs in with his defense of credit reporting.

Read the comments to see lots of emotional name-calling and poor argumentation.

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