Measurement of economies of scale in Victorian credit unions

This study on economies of scale in credit unions differs from the only previous Australian study in three important ways: (a) the cost function is derived from the translog production function; (b) estimates of economies of scale are made for four cross‐sectional periods, not one; and (c) the total sample of credit unions is divided into subsamples by asset size and bond of association type. Significant diseconomies of scale are found for some subsamples of small credit unions but for most subsamples the null hypothesis of constant returns to scale is not rejected.