Does Organizational Form Impact Pricing Asymmetry? Evidence from Nonprofit Financial Institutions. (1st October 2014)

• Record Type: Journal Article
• Authors: Jackson, William E.
• Is Part Of: Southern economic journal. Volume 81:Number 2(2015)
• Page Start: 506
• Page End: 518
• Publication Date: 2014-10-01
• Subjects: Southern States -- Economic conditions -- Periodicals; Economics -- Periodicals; Economic history; Economics; Southern States; Periodicals; 330.975005
• DOI: 10.4284/0038-4038-2012.294
• Languages: English
• ISSNs: 0038-4038

Abstract

<abstract abstract-type="main"> <title> <x xml:space="preserve">Abstract</x> </title> <p>Why output prices tend to rise faster in response to input cost increases than they fall in response to input cost decreases is a hotly debated issue in modern economics. In this article, I contribute to this asymmetric pricing debate by expanding the domain of organizational forms where this question has been investigated. More specifically, previous research has focused on for‐profit firms. I expand the investigation by focusing on nonprofit organizations. Credit unions are the nonprofit organization used in my analysis. Credit unions provide essentially identical types of consumer financial services and products as commercial banks but do so from a very different not‐for‐profit orientation. However, in this study, I document similar asymmetric rate‐setting behavior by credit unions. This suggests that pricing asymmetry is likely to be much more widespread, as it relates to nonprofit institutions as well as those in the for‐profit sector.</p> </abstract>