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Geographic Differentials In The Rate Of Return On Savings And Loan Assets

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  • Richard J. Cebula

    (Georgia Institute of Technology)

Abstract

Based on a constrained S&L profit-maximization model, this empirical study estimates six reduced-form equations, using a heteroskedasticity correction, to identify the factors influencing the rate of return on S&L assets. For the years 1988 and 1989, the results consistently imply that the rate of return on S&L assets is an increasing function of the mortgage rate, the percentage of gross state product (GSP) deriving from manufacturing, and the capitaVasset ratio. In addition, it appears that the rate of return on S&L assets is a decreasing function of the volatility of gross state product, the cost of deposits, and very high mortgage delinquency rates.

Suggested Citation

  • Richard J. Cebula, 1996. "Geographic Differentials In The Rate Of Return On Savings And Loan Assets," The Review of Regional Studies, Southern Regional Science Association, vol. 26(1), pages 41-53, Summer.
    • Handle: RePEc:rre:publsh:v:27:y:1996:i:1:p:41-53
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    References listed on IDEAS

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    1. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    2. Cebula, Richard, 1993. "The Regional Distribution of Bank Closings in the United States: An Extension of the Amos Analysis," MPRA Paper 51488, University Library of Munich, Germany.
    3. Cebula, Richard, 1992. "The Impact of Federal Deposit Insurance on Savings and Loan Failures," MPRA Paper 51540, University Library of Munich, Germany.
    4. James R. Barth, 1991. "The Great Savings and Loan Debacle," Books, American Enterprise Institute, number 918256, September.
    5. Edward J. Kane, 1985. "The Gathering Crisis in Federal Deposit Insurance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611856, December.
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    1. Richard J. Cebula, 1997. "The Rate Of Return On Savings And Loan Assets," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 17(2), pages 3-24, January.

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