Who competes with whom? the case of depository institutions

Robert M. Adams, Kenneth Brevoort and Elizabeth K. Kiser
Additional contact information
Robert M. Adams: https://www.federalreserve.gov/econres/robert-m-adams.htm
Elizabeth K. Kiser: https://www.federalreserve.gov/econres/elizabeth-k-kiser.htm

No 2005-03, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Little empirical work exists on the substitutability of depository institutions. In particular, the willingness of consumers to substitute banks for thrifts and to switch between multimarket and single-market institutions (i.e., institutions with large vs. small branch networks) has been of strong interest to policymakers. We estimate a structural model of consumer choice of depository institutions using a panel data set that includes most depository institutions and market areas in the United States over the period 1990-2001. Using a flexible framework, we uncover utility parameters that affect a consumer's choice of institution and measure the degree of market segmentation for two institution subgroups. We use our estimates to calculate elasticities and perform policy experiments that measure the substitutability of firms within and across groupings. We find both dimensions --thrifts and banks, and single- and multimarket institutions-- to be important market segments to consumer choice and, ultimately, to competition in both urban and rural markets.

Keywords: Banks and banking; Thrift institutions; Financial institutions (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-com and nep-ure
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Citations: View citations in EconPapers (31)

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Related works:
Journal Article: WHO COMPETES WITH WHOM? THE CASE OF DEPOSITORY INSTITUTIONS* (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2005-03

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