Kevin E. Rogers

Nontraditional activities and the efficiency of US commercial banks

Abstract In recent years, an increasing portion of bank income has been generated through nontraditional activities. Most studies of bank efficiency do not include any measure of nontraditional activities when measuring outputs. In this paper, cost, revenue, and profit efficiency are estimated by using models with and without nontraditional output. The results suggest that the standard model which omits nontraditional output understates bank efficiency. Evidence also surfaces that based on efficiency, the relative ranking of individual banks changes when nontraditional activities are included as a type of output.

An analysis of nontraditional activities at U.S. commercial banks

Abstract In recent years, commercial banking in the United States has experienced a decline in its traditional business of financing loans by issuing deposits. Simultaneously, banks have become more involved in nontraditional activities that provide financial services and generate fee income. As a result, real aggregate noninterest income has risen relative to income from traditional activities. This paper examines features common to banks that are heavily engaged in nontraditional areas. The empirical analysis suggests that these banks tend to be larger, have smaller net interest margins, have relatively fewer core deposits, and exhibit less risk. These findings have intuitive appeal and conform to conventional wisdom; while larger banks have fewer core deposits and face more competitive interest rate conditions, resulting in narrow spreads from traditional intermediation, they have more diverse sources of revenue and greater access to financial markets, which reduces risk.

A Short-Run Cost-Benefit Analysis of Community-Based Interventions for Juvenile Offenders:

Recent empirical research indicates that for juvenile offenders various community-based intervention techniques result in significantly greater positive effects when compared to more traditional approaches. This article presents a cost-benefit evaluation of two such techniques: intensive supervision and monitoring (ISM) and intensive outpatient counseling with cognitive behavioral therapy (CB). A two-equation regression model that controlled for differences in demographic characteristics, personality traits, behavior, and the home environment of the subjects was estimated. The results indicate that, relative to those on probation, participants in the CB program imposed significantly fewer costs on the justice system during the investigative period. No significant difference in justice system expenditures was demonstrated by the ISM group. Comparing the reduced costs of the CB program to the marginal cost of administering the program revealed a net saving of

Decomposing the CO2-income tradeoff: an output distance function approach

1,435 in justice system expenditures per youth offender served for the sample period.

Product Mix, Bank Powers, and Complementarities at U. S. Commercial Banks

The environmental Kuznets curve (EKC) hypothesis holds that economic growth leads to increases in pollution in early stages of development, but is a significant driver of environmental improvements as income levels increase. Most empirical applications have focused on estimating a reduced form equation in which the measure of environmental degradation is posited as a non-linear function of income. In this paper we develop a structural production model based on an output distance function to investigate the EKC hypothesis for CO 2 in a panel of industrialized countries from 1971 to 2000. This structural approach allows for the decomposition of the observed emission changes into the scale, composition, and productivity effects, thus providing additional insight into the interlinked processes of economic growth and environmental change. The findings from our preferred model indicate that for most countries, the CO 2 -saving productivity effect is not large enough to offset the CO 2 -producing scale effect.

Truth-in-sentencing, law enforcement, and inmate population growth

Abstract Previous studies of complementarities between types of bank output have found little evidence of advantages to broadening product mix, providing limited support for the expansion of bank powers. In this study, a relatively broad measure of bank output has been used which includes off-balance-sheet activities and other financial services in addition to loans and deposits. Under this framework, complementarities were estimated using cost, revenue, and profit frontiers. The results suggest that joint production of traditional and nontraditional products enhances marginal profits, although the source of these gains varies by product pair. Profit gains associated with the joint production of loans with deposits and nontraditional products appear to be driven by cost reductions and increased output, not price increases. These findings suggest net benefits from expanding bank powers into products which have supply-side and demand-side characteristics similar to those of existing bank products.

The Union Relative Wage Effect for Academic Librarians

Abstract This paper presents the empirical estimation of an econometric model of the flow of prisoners into a state correctional system. Specifically, an econometric model was built to control for the number of parolees, the probability of admission to the state system, the size of the state population, the unemployment and poverty rates, the number of law enforcement officers within the state, and the state-wide “truth-in-sentencing” law, which requires convicts to serve at least 85% of their sentences. One primary result was that increases in the number of law enforcement officers has generated a decline in the growth rate of the prison population. This suggests that a “deterrent effect” is created when more police are placed on the beat. Furthermore, the results indicate that the truth-in-sentencing law has also slowed the rate of inmate population growth. This finding may reflect the growing trend for courts to hand down nontraditional sentences and to adjust prison sentences to reflect a constant “real time” of incarceration by crime.

Economic literacy and policy perceptions during the financial crisis

This note investigates the impact of labor unions on the starting salaries of academic librarians. Using data collected from members of the Association of Research Libraries (ARL) and employing standard ordinary least squares (OLS) and seemingly unrelated regressions techniques, the union relative wage gap was estimated annually over the 1989-1998 time period. Three important results were found. First, unionized academic librarians received a positive and significant union wage premium throughout most of the decade studied. Second, this wage premium declined in magnitude over time following the trend in the economy as a whole. Lastly, by the end of the sample period, the wage effect had disappeared and was no longer significantly different from zero.

High School Economic Education and Access to Financial Services

In the chapter a national survey administered in the spring of 2010 is used to evaluate the relationship between economic literacy and personal opinions regarding the recent financial crisis and ensuing recession. The survey results showed a discrepancy between perceived and revealed economic understanding for American adults. While 55 percent of survey respondents rated their understanding of economics as either good or excellent, on average the sample scored only 47 percent correct on a short quiz covering basic economic concepts. This divergent relationship was found to persist across all levels of obtained economic education. Survey respondents were asked to identify those agents they held responsible for instigating the financial crisis as well as possible policy solutions to the resulting Great Recession. A probit model is used to analyse the factors influencing the holding of reported opinions. The results indicate that those with formal economic education were more likely to blame the banking and mortgage industries for the crisis and favored a reduced role of government in the economy as a solution to the recession.