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Demand estimation and consumer welfare in the banking industry

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  • Dick, Astrid A.
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    Abstract

    This paper estimates a structural demand model for commercial bank deposit services in order to measure the effects on consumers given dramatic changes in bank services throughout US branching deregulation in the 1990s. Following the discrete choice literature, consumer decisions are based on prices and bank characteristics. Consumers are found to respond to deposit rates, and to a lesser extent, to account fees, in choosing a depository institution. Moreover, consumers respond favorably to the branch staffing and geographic density, as well as to the bank's age, size, and geographic diversification. Consumers in most markets experience a slight increase in welfare throughout the period.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 32 (2008)
    Issue (Month): 8 (August)
    Pages: 1661-1676

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    Handle: RePEc:eee:jbfina:v:32:y:2008:i:8:p:1661-1676

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    Web page: http://www.elsevier.com/locate/jbf

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    16. Calomiris,Charles W., 2006. "U.S. Bank Deregulation in Historical Perspective," Cambridge Books, Cambridge University Press, number 9780521028387, April.
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    21. Astrid A. Dick, 2002. "Demand estimation and consumer welfare in the banking industry," Finance and Economics Discussion Series 2002-58, Board of Governors of the Federal Reserve System (U.S.).
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