Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/242554
Authors: 
Girotti, Mattia
Meade, Richard
Year of Publication: 
2017
Series/Report no.: 
Economics Working Paper Series No. 2017/08
Publisher: 
Auckland University of Technology (AUT), Faculty of Business, Economics and Law, Auckland
Abstract: 
Originally, U.S. savings banks were owned by their depositors. In recent decades, many savings banks have "demutualized", by converting from customer to investor ownership. We examine the implications of such events for depositor welfare. We introduce a random coefficients logit model of bank account choice and estimate depositors' tastes for bank characteristics (including banks' ownership type). We then measure the effect on depositor welfare of a simulated demutualization of all customer-owned savings banks. We find that depositors' welfare would increase on average. In particular, if demutualize savings banks offered a deposit rate in line with existing demutualized banks, each depositor would gain $1.14 annually, for a total of $22 million for each state and year.
Subjects: 
Banks
Deposits
Demand Estimation
Customer Ownership
Mutuals
JEL: 
D12
G21
L21
P13
Document Type: 
Working Paper

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