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New evidence on the Fed's productivity in providing payments services

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  • R. Alton Gilbert
  • David C. Wheelock
  • Paul W. Wilson

Abstract

As the dominant provider of payments services, the efficiency with which the Federal Reserve provides such services in an important public policy issue. This paper examines the productivity of Federal Reserve check-processing offices during 1980-1999 using non-parametric estimation methods and newly developed methods for non-parametric inference and hypothesis testing. The results support prior studies that found little initial improvement in the Fed's efficiency with the imposition of pricing for Federal Reserve services in 1982. However, we find that median productivity improved substantially during the 1990s, and the dispersion across Fed offices declined.>

Suggested Citation

  • R. Alton Gilbert & David C. Wheelock & Paul W. Wilson, 2002. "New evidence on the Fed's productivity in providing payments services," Working Papers 2002-020, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2002-020
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Robert DeYoung & William Hunter & Gregory Udell, 2004. "The Past, Present, and Probable Future for Community Banks," Journal of Financial Services Research, Springer;Western Finance Association, vol. 25(2), pages 85-133, April.
    2. Barnes, Michelle L. & Lopez, Jose A., 2006. "Alternative measures of the Federal Reserve Banks' cost of equity capital," Journal of Banking & Finance, Elsevier, vol. 30(6), pages 1687-1711, June.
    3. Wheelock, David C. & Wilson, Paul W., 2008. "Non-parametric, unconditional quantile estimation for efficiency analysis with an application to Federal Reserve check processing operations," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 209-225, July.
    4. Faridah Djellal & Faïz Gallouj, 2009. "Public services and the productivity challenge," Working Papers hal-01111797, HAL.
    5. Jaffry, Shabbar & Ghulam, Yaseen & Cox, Joe, 2008. "Labour use efficiency in the Indian and Pakistani commercial banks," Journal of Asian Economics, Elsevier, vol. 19(3), pages 259-293, June.
    6. Curi, Claudia & Gitto, Simone & Mancuso, Paolo, 2011. "New evidence on the efficiency of Italian airports: A bootstrapped DEA analysis," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 84-93, June.
    7. Faridah Djellal & Faïz Gallouj, 2007. "Les services publics à l'épreuve de la productivité et la productivité à l'épreuve des services publics," Revue d'économie industrielle, De Boeck Université, vol. 0(3), pages 2-2.
    8. Edward J. Green & Jose A. Lopez & Zhenyu Wang, 2003. "Formulating the imputed cost of equity capital for priced services at Federal Reserve banks," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 55-81.
    9. Loretta J. Mester, 2003. "Applying efficiency measurement techniques to central banks," Working Papers 03-13, Federal Reserve Bank of Philadelphia.

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    Keywords

    Productivity ; Payment systems ; Check collection systems;

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