User talk:Maeenuddin

Boone Indicator A measure of degree of competition, calculated as the elasticity of profits to marginal costs. ... The estimated coefficient (computed from the first derivative of a trans-log cost function) is the elasticity. Schaek and Cihak (2010)presented the modified form of Boone indicator by replacing average cost with marginal cost. The rationale behind the indicator is that higher profits are achieved by more-efficient banks. Elasticity can be calculated by taking log of profit (measured by Return of Assets) regressed on the log of marginal cost MC. More negative BI shows higher degree of competition because the effect of reallocation is stronger.