Assessing Bank Competition for Consumer Loans
39 Pages Posted: 23 Jan 2015 Last revised: 27 Jan 2015
Date Written: January 22, 2015
We assess the competitiveness of the $400 billion dollar U.S. bank consumer loan market by comparing results from different competition measures-HHI, Lerner Index, H-Statistic along with three others, two of which are related to frontier analysis. These measures are typically weakly related to one another and only half of them identify banks with the highest loan price and spread as also being the least competitive. This is the opposite of what would be expected. The states where the most and least competitive banks are located are noted. The most populous states with the largest banks are underrepresented.
Keywords: consumer loans, bank competition, frontier analysis
JEL Classification: G21, L80, L00
Suggested Citation: Suggested Citation