Market Structure and Competition Among Retail Depository Institutions

Cohen, Andrew; Mazzeo, Michael J.

doi:10.2139/ssrn.513002

Cited by 42 publications

(51 citation statements)

References 14 publications

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“…28 Other researchers have found similar effects of a second entrant in other markets (e.g. Mazzeo (2002) and Cohen and Mazzeo (2007)). markets with a large population and a large proportion of nurses.…”

Section: Estimates Of the Identified Setmentioning

confidence: 65%

“…Clinics of different ownership types vary in the payment forms they receive. 16 We model the decision to offer OSAT in a distinct geographic area. We focus on the 1,702 U.S. counties with populations between 5,000 and 100,000 that are not within in a Metropolitan or Consolidated Statistical Area (MSA or CSA).…”

Section: Datamentioning

confidence: 99%

“…Many of these facilities are in large metropolitan areas, and thus outside of the scope of the present paper. 16 For example, 69.7% percent of non-profits accept Medicaid for payment, but only 33.5% of for-profits clinics accept Medicaid. Cash or self-payment is accepted at 99.1% percent of for-profit clinics but only 79.8% of public clinics.…”

Section: Datamentioning

confidence: 99%

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Competition and Crowding-Out among Public, Non-Profit, and For-Profit Organizations: Evidence from Outpatient Substance Abuse Treatment

Cohen

Freeborn²,

McManus

2007

SSRN Journal

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U.S. markets for outpatient substance abuse treatment (OSAT) include clinics that are private for-profit, private non-profit, and public (i.e., government-run). We study the market structure of OSAT using recently-developed methods from the empirical industrial organization literature on equilibrium market structure in differentiated product markets. These methods allow us to describe OSAT clinics as heterogeneous in their objectives, their responses to exogenous market characteristics, and their responses to one another. We find that the presence of a public clinic in a market reduces the probability that a private clinic will also participate in the market, which is consistent with crowding-out between public and private provision of OSAT.Crowding out appears to be more prevalent in markets with larger white populations.

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Section: Estimates Of the Identified Setmentioning

confidence: 65%

Section: Datamentioning

confidence: 99%

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Competition and Crowding-Out among Public, Non-Profit, and For-Profit Organizations: Evidence from Outpatient Substance Abuse Treatment

Cohen

Freeborn²,

McManus

2007

SSRN Journal

Self Cite

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show abstract

“…Indeed, competition between banks may encourage them to specialize and find product niches (see Cohen and Mazzeo (2004)). This strategy would tend to loosen the correlation of performance across banks in a market in response to a particular kind of shock.…”

Section: Previous Approaches To Assessing Regional Economic Influencesmentioning

confidence: 99%

Regional Economic Conditions and the Variability of Rates of Return in Commercial Banking

Furlong

Krainer

2007

SSRN Journal

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We develop new techniques to assess the relationship between commercial bank performance and the economic conditions in the markets in which they operate. In the analysis, we allow for heterogeneity in the responses of banks to regional economic conditions. We find a statistically significant relationship between bank performance and shocks to the regional markets in which they operate. We find that region-specific shocks have a significant and persistent effect on the cross-sectional variance of bank performance in the market. That is, shocks affecting average performance of banks in a region also tend to increase the dispersion of their performance. We demonstrate that this effect is due to heterogeneity in the banks' exposures to their regional economies. Moreover, by allowing for this heterogeneity, we find that systematic responses to regional economic effects are notably more important in explaining the variation in bank performance than suggested by analysis in which responses are constrain to be the same for all banks.

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“…50 A number of studies find, among other things, markets with lower concentration or more mobile households seem more competitive. See, e.g., Calem and Carlino (1991), Cohen andMazzeo (2004), andDick (2003). 46 functions and productivity.…”

mentioning

confidence: 99%

A General-Equilibrium Asset-Pricing Approach to the Measurement of Nominal and Real Bank Output

2004

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This paper addresses the proper measurement of financial service output that is not priced explicitly. It shows how to impute nominal service output from financial intermediaries' interest income, and how to construct price indices for those financial services. We present an optimizing model with financial intermediaries that provide financial services to resolve asymmetric information between borrowers and lenders. We embed these intermediaries in a dynamic, stochastic, general-equilibrium model where assets are priced competitively according to their systematic risk, as in the standard consumption-capitalasset-pricing model. In this environment, we show that it is critical to take risk into account in order to measure financial output accurately. We also show that even using a risk-adjusted reference rate does not solve all the problems associated with measuring nominal financial service output. Our model allows us to address important outstanding questions in output and productivity measurement for financial firms, such as: (1) What are the correct "reference rates" to use in calculating bank output? In particular, should they take account of risk? (2) If reference rates need to be risk-adjusted, does it mean that they must be ex ante rates of return? (3) What is the right price deflator for the output of financial firms? Is it just the general price index? (4) When-if ever-should we count capital gains of financial firms as part of financial service output?Prepared for CRIW conference on Price Index Concepts & Measurement, Vancouver, June 28-29, 2004. We thank Erwin Diewert, Dennis Fixler, Charles Hulten, Alice Nakamura, Emi Nakamura, Marshall Reinsdorf, Paul Schreyer, Jack Triplett, and Kim Zieschang for helpful discussions, and Felix Momsen for data assistance. The views in this paper are those of the authors, and should not be construed as necessarily reflecting the views of the Board of Governors or anyone else affiliated with the Federal Reserve System. In many service industries, measuring real output is a challenge because it is difficult to measure quality-adjusted prices. In financial services, however, there is not even an agreed-upon conceptual basis for measuring nominal let alone real output. In this paper, we address this problem and propose a resolution of some major long-standing debates on how to measure bank output. 1 We present a dynamic, stochastic, general equilibrium (DSGE) model in which nominal and real values of bank output-and, hence, the price deflator-are clearly defined. We then assess the adequacy of existing national accounting measures in a fully-specified DSGE setting. Our model is a general-equilibrium extension of Wang's (2003a) partialequilibrium framework, and it validates Wang's proposed measure of real bank service flows.Conceptually, the most vexing measurement issue arises because banks and other financial service providers often do not charge explicit fees for services, but rather incorporate the charges into an interest rate margin--the spread between the...

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Market Structure and Competition Among Retail Depository Institutions

Cited by 42 publications

References 14 publications

Competition and Crowding-Out among Public, Non-Profit, and For-Profit Organizations: Evidence from Outpatient Substance Abuse Treatment

Competition and Crowding-Out among Public, Non-Profit, and For-Profit Organizations: Evidence from Outpatient Substance Abuse Treatment

Regional Economic Conditions and the Variability of Rates of Return in Commercial Banking

A General-Equilibrium Asset-Pricing Approach to the Measurement of Nominal and Real Bank Output

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