IDEAS home Printed from https://ideas.repec.org/a/ucp/jnlbus/v66y1993i3p437-62.html
   My bibliography  Save this article

The Role of Fixed Costs and Cost Complementarities in Determining Scope Economies and the Cost of Narrow Banking Proposals

Author

Listed:
  • Pulley, Lawrence B
  • Humphrey, David B

Abstract

'Narrow' banking proposals would separate insured deposits from most types of bank lending. Using data from large U.S. banks, the authors examine the extent to which narrow banking proposals are likely to result in increased production costs. Production costs will rise for nonjoint provision of deposit and loan services if there are cost complementarities in producing the two outputs jointly or if joint production enables banks to spread their fixed costs more effectively. Unlike standard cost function approaches, the authors' methods allow them to estimate the fixed-cost and cost-complementarity effects separately. They find the net production cost consequences of narrow banking to be negligible. Copyright 1993 by University of Chicago Press.

Suggested Citation

  • Pulley, Lawrence B & Humphrey, David B, 1993. "The Role of Fixed Costs and Cost Complementarities in Determining Scope Economies and the Cost of Narrow Banking Proposals," The Journal of Business, University of Chicago Press, vol. 66(3), pages 437-462, July.
  • Handle: RePEc:ucp:jnlbus:v:66:y:1993:i:3:p:437-62
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/296611
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jnlbus:v:66:y:1993:i:3:p:437-62. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/JB/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.