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Scale Economies in the N.S.W. Permanent Building Society Industry

Author

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  • Harvey R. Crapp

    (Kuring-gai College of Advanced Education. Support from the Centre for Securities Industries Studies at Kuring-gai College of Advanced Education is gratefully acknowledged. The technical assistance of Linda Allingham and the helpful comments on earlier drafts by Bruce Rosser, Zoltan Matolcsy and an anonymous referee, were appreciated. The usual disclaimer applies.)

Abstract

The cost relationships of Building Societies in New South Wales are examined with a view to determining the existence of scale economies. A series of cost equations for each year from 1976 to 1980 inclusive are estimated assuming the underlying production function is Cobb-Douglas. Through the process of examining these cost relationships a rigorous methodology for evaluating scale economies is developed. The existence of scale economies is established as well as a marginal decline in the magnitude of scale economies over the study period.

Suggested Citation

  • Harvey R. Crapp, 1982. "Scale Economies in the N.S.W. Permanent Building Society Industry," Australian Journal of Management, Australian School of Business, vol. 7(1), pages 33-48, June.
    • Handle: RePEc:sae:ausman:v:7:y:1982:i:1:p:33-48
    DOI: 10.1177/031289628200700104
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    References listed on IDEAS

    as
    1. Wolken, John D & Navratil, Frank J, 1980. "Economies of Scale in Credit Unions: Further Evidence," Journal of Finance, American Finance Association, vol. 35(3), pages 769-777, June.
    2. Randall Geehan, 1977. "Returns to Scale in the Life Insurance Industry," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 497-514, Autumn.
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    Cited by:

    1. Esho, Neil & Sharpe, Ian G., 1995. "Long-run estimates of technological change and scale economies in a dynamic framework: Australian permanent building societies, 1974-1990," Journal of Banking & Finance, Elsevier, vol. 19(7), pages 1135-1157, October.

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