Moral hazard in a voluntary deposit insurance system: Revisited

Pablo Camacho-Gutiérrez () and Vanessa M. González-Cantú

MPRA Paper from University Library of Munich, Germany

Abstract: This paper extends Wheelock and Kumbhakar’s (1995) test for moral hazard in the Kansas deposit insurance system (1910-1920). This paper tests and finds evidence of omitted bank-specific effects. Estimates in Wheelock and Kumbhakar (1995), as a result, are biased. This paper introduces unobserved individual heterogeneity to the test for moral hazard, corrects their estimates, and finds more evidence of moral hazard in the Kansas deposit insurance system.

Keywords: Deposit insurance; moral hazard test; panel data; random and fixed effects (search for similar items in EconPapers)
JEL-codes: C33 C35 G21 G28 (search for similar items in EconPapers)
Date: 2007-05-31
New Economics Papers: this item is included in nep-ban and nep-ias
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:3909

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