EXPENSES IN DISTRICTS I AND IJ 297
average for each group in 1922. (3) Add the ratios for 1923
for the banks falling in each of the groups in 1922, and divide
by the number of ratios, thus obtaining a 1923 average for
each group for which a 1922 average is secured. (4) Compare
the two averages by subtracting the amount for the first from that
for the second year. In order to cover all years, repeat these
processes for 1923 and 1924, and 1924 and 1925; total the sums
of the ratios and of the instances by groups for the three pairs
of years, compute averages for the combined first years and
combined second years, and compare the results by subtracting
the amount for the first from the amount for the second years,
By carrying through these several steps for member banks in
the Boston district, the results in Table 170 are secured. They
give direct and simple measures of regression, expressed in points
of change in the average ratios between successive years, of the
same types as those already found for the same body of data,
but arrived at in other ways. All methods agree in indicating that,
on the average, total expense ratios which are low in a given year
tend to increase, and those which are high tend to decrease
the following year, the amounts of the change, expressed abso-
lutely or in percentage form, being positively correlated with
the positions of the ratios on the expense scale. There is re-
gression to type, the amount being largest for banks in “exposed
TABLE 170
AVERAGE NET CHANGE IN RATIOS oF ToTAL EXPENSE TO EARNING
ASSETS, BY PAIRS OF YEARS, 1922-1925, MEMBER BANKS,
BosTON FEDERAL RESERVE DISTRICT
YEARS
RaT108: Total
Expense to
Earning Assets
First Year of
Each Pair of
Years)
and under
and under ,
and under «4
and under :
; and under 6
> and under 7
+ and over
iumha-
Total
Second
ears less
_irst
ton po
‘IT 6
1022 and 1022
Numkbe
Second
=a" less
t
te “0
1923 and 1024
Second
“»ar less
irst
>.
0.4
-— 2
1924 and 102%
Number
Second
=r less
-st
-
ST
to.x
-0.3
-0.2
-_y A
