Daniel M. Gropper

Frontier Estimation and Firm-Specific Inefficiency Measures in the Presence of Heteroscedasticity

The purpose of this article is to illustrate a straightforward and useful method for addressing the problem of heteroscedasticity in the estimation of frontiers. A heteroscedastic cost-frontier model is developed and estimated using bank cost data similar to that used by Ferrier and Lovell. Our results show dramatic changes in the estimated cost frontier and in the inefficiency measures when accounting for heteroscedasticity in the estimation process. We find that the rankings of firms by their inefficiency measures is affected markedly by the correction for heteroscedasticity but not by alternative distributional assumptions about the one-sided error term.

Crime in the Classroom: An Economic Analysis of Undergraduate Student Cheating Behavior

A logit model is used to study the cheating behavior of students in two large principles of microeconomics classes: cheating is inversely related to GPA and directly related to the perception of the number of students who routinely cheat.

Plasma Amino Acid Response to Ingestion of L-amino Acids and Whole Protein

The effect of whole protein and L-amino acid ingestion on plasma amino acid concentrations was investigated in 10 men. Each subject ingested equivalent amounts of amino acids as cottage cheese (session 1), an L-amino acid mixture (session 2), and cottage cheese and L-amino acids (session 3). Postprandial changes from baseline were larger for essential versus nonessential amino acids in each session. Higher and more rapid rises followed by more rapid declines in individual plasma amino acid concentrations were observed after ingestion of L-amino acids alone or with whole protein than after ingestion of an equivalent amount of amino acids as whole protein. Individuals receiving the majority of their essential amino acid and nitrogen needs from elemental products may need, for example, to consume them more frequently or after consumption of other foods in an effort to slow down absorption rates.

Finite Mixture Estimation of Multiproduct Cost Functions

This paper presents a technique of cost-function estimation, based on the theory of finite mixture distributions, which allows for the simultaneous existence of multiple technologies of production when the researcher does not know which observations correspond to which technologies. The finite mixture technique provides estimates of the proportions of firms using the various technologies, facilitates comparisons between technologies, and preserves the traditional interpretations of cost estimation. After describing the mixture procedure, the technique is illustrated on a large sample of savings and loan associations, and it is concluded that this industry exhibits multiple technologies of production. Copyright 1991 by MIT Press.

An Empirical Investigation of Changes in Scale Economies for the Commercial Banking Firm, 1979-1986

The period of the 1980s represents a particularly turbulent time for the banking industry. A number of technological and regulatory changes have occurred, including the elimination of Regulation Q which had limited the explicit interest payments that banks could pay on some types of deposits. It would be expected that these changes would affect the structure of costs for banks. The behavior of the cost function is studied over the 1979-1986 time period, and in contrast to previous studies using earlier data, increasing economies of scale are found in the later years for banks in both unit and branch banking states. These results indicate that there may be increased cost pressure for smaller banks to become larger, either through mergers and acquisitions or through internal growth. This may lead to further consolidation pressures within the industry, and reductions in the overall number of banking firms. Copyright 1991 by Ohio State University Press.

Does the GMAT Matter for Executive MBA Students? Some Empirical Evidence

This paper examines the relation of several factors, including the GMAT score, undergraduate background, and work experience to academic success in an Executive MBA program. The GMAT score was found to have a weak, if any, relation to overall academic success for Executive MBA students, although it was positively and significantly related to performance in a smaller set of first year classes. Work experience, particularly career advancement, was found to be positively and significantly related to overall program performance. Statistically significant program performance differences were also found by gender, indicating superior performance by women.

Modelling the consumer's decision to replace durable goods: a hazard function approach

This article analysis the consumers durable good replacement decision using hazard models. In contrast to the typical limited dependent variable model often used in durable good demand studies, hazard models allow for much richer replacement. To illustrate the technique, a recursive system consisting of a regression equation and a hazard model is used to examine home heating system replacement decisions by residencial customers of a major southeasten US electric utility. The results indicate that overall system replacement rates decline over time, and that the probability of replacement for specific households depends negatively on the age of the head of household abd the availability of natural gas, and positively on system age and higher than expected household energy use.

Test Structure, Human Capital, and Student Performance on Economics Exams.

The order of questions on an exam is shown to have no significant effect on exam scores, even after including variables that reflect differential student-specific human capital characteristics.

A note on savings and loan ownership structure and expense preference: A re-examination

This study extends the work of Akella and Greenbaum [Journal of Banking & Finance 12 (1988) 419] through the use of a much larger, nationwide sample of US saving and loan associations and supports their original finding of significant expense-preference behavior in mutual savings and loans during their original study period (1979–80). This study also provides evidence that over the time period of substantial deregulation and changes in the competitive environment in the US financial services industry, expense-preference behavior for savings and loans decreased. The results are consistent with the idea that the removal of barriers that restrict competition should improve managerial efficiency in firms that survive. 2003 Elsevier B.V. All rights reserved.

Deregulation and productivity changes in banking: evidence from European unification

Over the 1990s European banking markets became increasingly deregulated as European unification progressed. National borders become less relevant, and product line restrictions diminished, increasing competitive pressures on institutions to operate more efficiently. A stochastic frontier cost function is estimated for commercial banks across 15 nations in the European Union (EU) to obtain a better understanding of how banks adapted in this period of rapid change in the competitive environment. It is found that the banking systems in all individual countries became more efficient. Country rankings according to productivity changed little over the sample period, and productivity differences between banking systems narrowed. These results suggest that the policy of reducing restrictions and harmonizing regulations was consistent with promoting banking efficiency across the EU.