Scale Economies, Cost Efficiencies and Technological Change in Federal Reserve Payments Processing
J. OF MONEY, CREDIT, AND BANKING, Vol. 28 No. 4, November 1996
Posted: 15 Apr 1998
Abstract
This paper uses a stochastic cost frontier to examine the scale economies, cost efficiencies, and technological change of three payment instruments (check, ACH, and Fedwire processing) provided by the Federal Reserve over the period 1990-1994. We find evidence of substantial scale economies and cost inefficiencies in the ACH and Fedwire services. Check processing also exhibits substantial cost inefficiency, but is found to have experienced technological "regress," a finding that is likely due to a decrease in processing volume over the sample period.
JEL Classification: G28
Suggested Citation: Suggested Citation
Bauer, Paul W. and Ferrier, Gary D., Scale Economies, Cost Efficiencies and Technological Change in Federal Reserve Payments Processing. J. OF MONEY, CREDIT, AND BANKING, Vol. 28 No. 4, November 1996, Available at SSRN: https://ssrn.com/abstract=7700
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.