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An Empirical Analysis Of Determinants Of Geographic Differentials In The Bank Closing Rate In The United States, 1989-1994, Using The Heteroskedastic-Tobit Model

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  • Richard J. Cebula

    (Georgia Institute of Technology)

  • Willie J. Belton

    (Georgia Institute of Technology)

Abstract

This study empirically examines determinants of geographic (interstate) differentials in the bank failure rate in the United States for the period 1989-1994. The study uses the Heteroskedastic-TOBIT estimation technique because 20 percent of the observations on the dependent variable are zeros and because of the need to correct for heteroskedasticity. The findings indicate that the interstate bank closing rate differential is affected by the cost of deposits, the savings and loan failure rate, the percentage of gross state product deriving from oil and natural gas extraction, the tangible capitaUasset ratio, and state regulations that restrict bank branching.

Suggested Citation

  • Richard J. Cebula & Willie J. Belton, 1996. "An Empirical Analysis Of Determinants Of Geographic Differentials In The Bank Closing Rate In The United States, 1989-1994, Using The Heteroskedastic-Tobit Model," The Review of Regional Studies, Southern Regional Science Association, vol. 26(3), pages 341-350, Winter.
    • Handle: RePEc:rre:publsh:v:27:y:1996:i:3:p:341-350
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    References listed on IDEAS

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    1. James R. Barth & Carl D. Hudson & Daniel E. Page, 1991. "The Need To Reform The Federal Deposit Insurance System," Contemporary Economic Policy, Western Economic Association International, vol. 9(1), pages 24-35, January.
    2. Cebula, Richard, 1992. "The Impact of Federal Deposit Insurance on Savings and Loan Failures," MPRA Paper 51540, University Library of Munich, Germany.
    3. James R. Barth, 1991. "The Great Savings and Loan Debacle," Books, American Enterprise Institute, number 918256, September.
    4. 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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