THE STRUCTURE AND PERFORMANCE OF THE UK BUILDING SOCIETY INDUSTRY 1970–78

This article seeks to discuss some of the issues concerning the evolving structure of the Building Society Movement in the UK during the 1970's and to present some statistical evidence for certain hypotheses concerning the performance during this period. It is hypothesized that the successful operation of the price cartel affected its performance in a number of ways; for instance, with regard to its discretionary policies. The article cites branching policies particularly of the medium sized Societies and the regression results presented cast doubt upon the efficacy of such policies, validating in turn the hypotheses of expense preference and X inefficiency. In addition, evidence is offered on the concentration and competition within the Movement which together with the apparent discretionary policies found, provide a justification, in the view of the authors, for future legislative action.