C© 2008 The Author

They thank Coady Wing for helpful discussion. This paper uses propensity score matching methods to address an unrecognized methodological challenge in estimating discrimination in small business credit markets. The matching methods relax the functional form assumptions implicit in regression-based estimates. We analyze interest rates paid on approved loans pooling 1993, 1998 and 2003 waves of the Survey of Small Businesses Finances. Our findings indicate that, on average, Black and Hispanic-owned firms pay an interest rate that is, respectively, 0.791 and 0.486 percentage point higher than the rate paid by White-owned firms. We find no evidence of discrimination against White women in small businesses loans