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Bank Imputed Interest Rates: Unbiased Estimates of Offered Rates?

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  • ÖRS, Evren
  • Rice, Tara

Abstract

We examine whether ?imputed? interest rates obtained from bank financial statements are unbiased estimates of ?offered? interest rates that the same banks report in surveys. We find evidence of a statistically significant amount of bias. However, the statistical bias that we document does not appear to be economically significant. When used as dependent variables in regression analysis, imputed rates and offered rates lead to the same policy conclusions. Our work has important methodological implications for empirical research that examines the product market competition among depository institutions.

Suggested Citation

  • ÖRS, Evren & Rice, Tara, 2007. "Bank Imputed Interest Rates: Unbiased Estimates of Offered Rates?," CEPR Discussion Papers 6036, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:6036
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    References listed on IDEAS

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    Cited by:

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    2. Ben Craig & Valeriya Dinger, 2009. "Bank Mergers and the Dynamics of Deposit Interest Rates," Journal of Financial Services Research, Springer;Western Finance Association, vol. 36(2), pages 111-133, December.

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    More about this item

    Keywords

    Deposit rates; Imputed prices; Product market; Transaction prices;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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