THRIFT COST INEFFICIENCIES - DID DEREGULATION HELP

This paper examines the effect of deregulation on thrift cost ineffici encies using the thick frontier framework proposed by Berger and Humph rey (1991). Thick frontiers were estimated for a sample of nonacquirin g thrifts in 1978 and then in 1988, a period during which there was de regulation. The results suggest that the benefits of deregulation were mixed. Some thrifts managed costs over the period and emerged relativ ely unscathed. For these thrifts, deregulation resulted in lower costs . Other thrifts had many more problems. Far this group, inefficiencies rose between 1978 and 1988 because these thrifts paid tao much for fu nds and could not balance their product mix.