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In his study on the labor hours spent by the FDIC (Federal Deposit Insur- ance Corporation) on 91 bank examinations, R. J. Miller estimated the following function*:l^n Y = 2.41 + 0.3674 ln X1 + 0.2217 ln X2 + 0.0803 ln X3
(0.0477)
(0.0628)
-0.1755D1
(0.0287)
+ 0.2799D2 + 0.5634D3 - 0.2572D4
(0.2905)
(0.1044) (0.1657) (0.0787)
where Y = FDIC examiner labor hoursX1 = total assets of bankX2 = total number of of?ces in bankX3 = ratio of classi?ed loans to total loans for bankD1 = 1 if management rating was "good"D2 = 1 if management rating was "fair"D3 = 1 if management rating was "satisfactory"
R2 = 0.766
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