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Are credit unions too small?

David Wheelock and Paul Wilson

No 2008-033, Working Papers from Federal Reserve Bank of St. Louis

Abstract: Since 1985, the share of U.S. depository institution assets held by credit unions has nearly doubled, and the average (inflation-adjusted) size of credit unions has increased over 600 percent. We use a non-parametric local-linear estimator to estimate a cost relationship for credit unions and derive estimates of ray-scale and expansion-path scale economies. We employ a dimension-reduction technique to reduce estimation error, and bootstrap methods for inference. We find substantial evidence of increasing returns to scale across the range of sizes observed among credit unions, suggesting that an easing of regulations on credit union membership or activities would lead to further increases in the size of credit unions.

Keywords: Credit; unions (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)

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Journal Article: Are Credit Unions Too Small? (2011) Downloads
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