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Price and Prejudice: A Variance Components Analysis of Some Causes and Consequences of Regulating Chicago Storefront Banks

Published online by Cambridge University Press:  02 July 2024

Richard A. Berk ,
Robert Poolman  and
Jerrold Oppenheim
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Abstract

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The impact of government regulations on the functioning of markets is currently a topic of lively debate. In this paper we examine the effects of legislative and administrative regulations on the market for services provided by Chicago currency exchanges. Our findings suggest that the regulations stifle competition, with the result that the opportunity to extract excessive profits exists. And since currency exchanges tend to be concentrated in poorer neighborhoods with higher proportions of minority residents, the burdens of market inefficiencies fall on those individuals who can least afford them.

Type
Research Article
Information
Law & Society Review , Volume 14 , Issue 1 , Fall 1979 , pp. 7 - 26
Copyright
Copyright © 1979 The Law and Society Association.

Footnotes

*

Thomas Cooley, C.J. LaCivita, William Bielby, and three reviewers read and commented on an earlier version of this paper. We are grateful for their suggestions and hope we have done them justice.

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