Abstract
In this chapter we will be concerned with the efficiency of the building societies in two senses. Firstly, the efficiency of the individual societies within the industry, and in particular the relation of cost to size of society. Secondly, there is the matter of allocative efficiency which involves the tax/subsidy treatment of building societies and the housing market. This treatment will determine the size of the building society industry relative to other industries. For example, if the societies were especially favourably treated by the tax system, the result would be that the industry would be larger than if the tax system had been more neutral.
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References
For a detailed discussion of sources of economies and diseconomies of scale see Koutsoyiannis, A., op. cit.
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For example, the various aspects of output of insurance companies has to be allowed for: see Houston, D. B. and Simon, R. M., ‘Economies of scale in financial institutions: a study of life assurance’, Econometrica Vol. 38, No. 6 (1970), pp. 856–64.
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© 1982 T. J. Gough
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Gough, T.J. (1982). Efficiency. In: The Economics of Building Societies. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-05673-6_6
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DOI: https://doi.org/10.1007/978-1-349-05673-6_6
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