Bank Size and Household Financial Sentiment: Surprising Evidence from University of Michigan Surveys of Consumers

Berger, Allen N.; Irresberger, Felix; Roman, Raluca A.

Abstract

We analyze comparative advantages/disadvantages of small and large banks in improving household financial sentiment. Matching University of Michigan Surveys of Consumers household sentiment data with local banking market data from 2000 to 2014, we find surprising results—large banks have significant comparative advantages in boosting such sentiment. The findings apply across demographic groups, market types, and time periods, and are robust to different measurements and econometric methods. We contribute to the literatures on bank specialness, benefits and costs of small and large banks, household sentiment, and real effects of banking. We conjecture about the drivers of the findings, and discuss policy implications.

Citation

Berger, A. N., Irresberger, F., & Roman, R. A. (2020). Bank Size and Household Financial Sentiment: Surprising Evidence from University of Michigan Surveys of Consumers. Journal of Money, Credit and Banking, 52(S1), 149-191. https://doi.org/10.1111/jmcb.12738

• Journal Article Type: Article
• Acceptance Date: Aug 21, 2019
• Online Publication Date: Nov 6, 2020
• Publication Date: 2020-10
• Deposit Date: Jul 23, 2020
• Publicly Available Date: Nov 6, 2022
• Journal: Journal of Money, Credit and Banking
• Print ISSN: 0022-2879
• Electronic ISSN: 1538-4616
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 52
• Issue: S1
• Pages: 149-191
• DOI: https://doi.org/10.1111/jmcb.12738
• Public URL: https://durham-repository.worktribe.com/output/1260061
• Related Public URLs: http://eprints.whiterose.ac.uk/150047/