Measuring multi-product banks’ market power using the Lerner index
指出基于总资产的加总勒纳指数只有在三个条件成立时才能正确衡量多产品银行的市场势力，并用美国银行数据验证了这些条件不成立，提出加权平均勒纳指数作为替代方案。
The aggregate Lerner index is a popular composite measure of multi-product banks’ market power, based on total assets as the single aggregate output factor. We show that the aggregate Lerner index only qualifies as a consistently aggregated Lerner index if three conditions hold. Under these conditions, the aggregate Lerner index reduces to a weighted-average of the product-specific Lerner indices. We test the three conditions for a sample of U.S. banks covering the years 2011–2017. All three conditions are rejected and we show that they may cause an economically relevant bias to the aggregate Lerner index, depending on the economic context. As a general solution, we propose using the always consistently aggregated weighted-average Lerner index whenever a composite Lerner index is needed.