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In several recent studies scale economies in the operations of commercial banking have been detected, assuming that expansion takes place with a fixed number of plants [1, 2, and 3]. The data for these studies were available for the periods 1959-1961 and 1963-1965 in one region of the United States. The purpose of this paper is to reestimate similar functions for an expanded sample covering virtually the entire United States for the year 1968. in this way, the results of earlier studies may be checked for generality, and the effect of time on the results may be investigated. In Section II, the model is described. The data and empirical results are presented in Section III. Section IV is a summary and conclusion. [ABSTRACT FROM AUTHOR]

This article reports on commercial bank lending behavior in relation to the customers' depositing and borrowing decisions. The study uses date from various commercial banks in Massachusetts which provide a convenient set of commercial bank customers for a test of the deposit rate hypothesis. Testing of this hypothesis is difficult because commercial banks do not provide information concerning their individual customers and the relationship between bank and customer in many cases is multi-dimensional. Also, multiple regression analysis was applied to the survey data.

The article examines the impact of various technologies on banks' economies of scale, with particular focus on activities surrounding demand deposits at commercial banks. The authors present a cost function defined in terms of quantity of demand deposit accounts, wage rates, elasticities of output with respect to labor and capital, etc., and test it using data from 956 U.S. banks for 1968. Results indicate the presence of economies of scale for banks that use computers, but not for those that don't. Average costs for banks without computers were lower than for those with, but only when the number of demand deposit accounts was fewer than 10,600.

The article examines the demand for New York State Mutual Savings Bank deposits during the period 1960-1969. Monthly and quarterly levels and changes in savings deposits are regressed against personal income, the rate paid on savings accounts, and the rate available form AAA-rated bonds. The authors discuss their results, and use the regression coefficients to compare actual savings for the first quarter of 1970 with those predicted by their model. In this instance, the "level" equations performed better than the "change" equations.

Examines the experience of savings banks in Massachusetts concerning the form of ownership and risk taking in banking. Relation of the credit quality of loan portfolios to the size and structure of the portfolio and the ownership status of the bank; Influence of cyclical decline in property values on the decline in the credit quality of loan portfolios.

Analyses the efficiency of life insurance agencies in delivering financial services in the United States. Distribution of multiple financial products; Examination of scale and scope economies; Impact of selling mix financial products on scale returns.

In terms of the raw proportion of successful and unsuccessful borrowers in the survey, it would appear that there is a substantial group of people initially judged credit worthy by a finance company who were subsequently denied financing by other lenders. This result is consistent with the view of the National Commission on Consumer Finance that the imposition of rate ceilings tends to lead to a reduction in the availability of credit.
However, the multivariate analysis of the successful and unsuccessful borrowers in this study supports Benston's work [2]. That is, in terms of the characteristics that were available and which are typically used in credit scoring models, there does not seem to be a systematic relationship between denials and the measures reflecting credit worthiness. Finally, when the group of successful applicants is disaggregated by the type of institution making the loan, there is little evidence to support the hypothesis of market risk segmentation. It is still not possible to predict which loans would be made, let alone by which institution. The one noticeable difference is that commercial banks make a higher proportion of automobile loans than credit unions or finance companies. However, the reasons for the loan are not sufficient to separate the accommodated and nonaccommodated groups. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to estimate cost functions for the U.S. passenger airline industry in order to determine the sources of recent observed productivity, increases. A cost function is derived from the Cobb-Douglas production function, and the parameters of that reduced form equation are estimated. Special attention is given to effect of technology on costs. In general, it was found that there seem to be no scale economies present in the production of available seat miles, but that the level of technology has a substantial impact on cost and productivity. [ABSTRACT FROM AUTHOR]

In the paper "Sources of Productivity Increases in the U.S. Passenger Airline Industry," a log-linear cross-section function was estimated with several independent variables of the "dummy" or "shift" form. In this type of estimating procedure, the dummy variable is interpreted as a shift in the intercept due to some discrete event that is thought to influence the dependent variable. However, the intercept of the estimated linear transformed equation is a multiplicative factor in the equation before transformation. The nontransformed equation, of course, has no intercept. For this reason, the impact of technical change on cost cannot be determined from the equation directly. Using some values for each of the continuous independent variables, use the equation to calculate cost. In this case the mean values of the logarithm were used. If the value of each of the dummy variables is zero, then this calculated cost is interpreted as the expected annual cost of running a propeller driven plane for the sample geometric seat miles, fuel-cost, etc. Replicate this procedure with the addition of a value of unity for the first dummy variable. This is interpreted as the expected annual cost of running a turboprop plane for the sample geometric mean values of the continuous independent variables.