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Bank branch density and economic development

An important component in the development of an economy is for the population to be “banked”—that is, to have a bank account to save money and participate in the payment system. One indicator of the amount of banked people in a location (e.g., a state or country) used to be the number of bank branches in that location. The FRED graph above shows this statistic for a non-random set of countries: Mongolia, the United States, and Nigeria.

If this statistic is in some way representative of economic development, why is the number of bank branches in Mongolia so much higher than in the United States? And why are the numbers for the United States and Nigeria declining despite continuous economic growth?

The issue is that the banking industry has changed quite a bit: With automated teller machines (ATMs) and then online banking, the need for physical bank branches has been considerably reduced. This explains the decline in the United States. Furthermore, the level of banking competition, the geographic distribution of the population, and other factors can also influence these numbers and make cross-country comparisons difficult. Thus, some conjunction of special circumstances has caused Mongolia to have the second-highest concentration of bank branches in the world, just behind Luxembourg.

Finally, why is this statistic not growing in Nigeria? The continent of Africa has its challenges, especially in rural areas. However, cell phones have become an unexpected source of financial development, not only through “traditional” mobile banking, but also by using phone minutes as currency for online transactions. This reduces the need for physical bank branches.

How this graph was created: Search for “Mongolia bank branches” and click on the result. Open the graph, click on “Edit Graph,” open the “Add Line” tab, and search for “United States bank branches.” Repeat for Nigeria.

Suggested by Christian Zimmermann.

FRED on Frederick

County- and metropolitan-level data in FRED

FRED does not offer data on itself, but it does offer data on Frederick.

Frederick is a town in Maryland that gave its name to its county and metropolitan area. There’s also a Frederick County in neighboring Virginia. A FRED search for Frederick gives (at the time of this writing) 554 results: 290 for counties and 264 for metropolitan areas. We invite our friends to explore the world of regional data in FRED, which you can monitor with the use of FRED’s dashboard feature. For now, back to Frederick.

Both Fredericks are within commuting distance to Washington, D.C., and have experienced strong population growth. Just look at the first FRED graph. This population growth has also led to sustained growth in income in both counties, which the FRED graph above shows. A population boom combined with rising incomes leads us naturally to more expensive housing, as the FRED graph below shows.

How these graphs were created: In each case, we started from the search for “Frederick,” clicked on one series, clicked on “Edit Graph,” and added the other line by searching for the other series in the “Add Line” tab.

Suggested by Christian Zimmermann.

Turkey or Tofurkey?

A protein price comparison for the Thanksgiving meal

This is the time of the year to give thanks, and the FRED Blog is thankful for the rich variety of data series and data sources available in FRED. In years past, we’ve tapped data from the International Monetary Fund, the U.S. Bureau of Labor Statistics, and Eurostat to assemble tasty graphs showing the price of traditional Thanksgiving meals. Today, we compare a poultry-based meal with a plant-based meal.

Let’s start with a data literacy appetizer. The FRED graph above plots the quarterly global prices of poultry (including turkey) in orange and soybeans (the main ingredient in tofu) in green, as reported by the International Monetary Fund. Savor the fact that the units of each series are different: poultry prices are reported in U.S. cents per pound of meat (on the left axis), and soybean prices are reported in U.S. dollars per metric ton (on the right axis).

Also, notice how relatively stable the prices of both commodities are from quarter to quarter. Even though the data are not seasonally adjusted, the prices do not regularly increase or decrease during a calendar year. We can thank the global supply of both commodities for the lack of seasonality in prices.

Now for the main course: turkey (i.e., poultry) or tofurkey (i.e., soybeans)? According to the U.S. Department of Agriculture, roasted turkey has almost 3 times the caloric value and 1.5 times the protein value of an equivalent serving of fried tofu by weight. Between 1990 and the time of this writing, the average global price of poultry has been 6 times higher than the price of soybeans.

As of the third quarter of 2021, a hearty Thanksgiving dinner serving of turkey costs $1.42. A tofurkey (soybean) dinner serving with the same amount of calories costs $0.66 and provides almost twice as much protein. Keep in mind that this plant-based meal would be almost 3 times larger by weight than the poultry-based meal and may either keep you at the dinner table longer or provide you with more leftovers. Of course, our calculations here don’t include the time value, energy costs, and additional ingredients required to cook the meals.

How these graphs were created:
Global prices (the graph shown here). Search for and select “Global price of Poultry.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Global price of Soybeans.” To change the line color, mark types, and Y-axis position of the series, use the “Format” panel.
Relative prices (the first linked graph). Search for and select “Global price of Poultry.” From the “Edit Graph” panel, use the “Edit Line 1” tab to customize the data by searching for and selecting “Global price of Soybeans.” Last, create a custom formula to combine the series to make them comparable pound for pound and dollar for dollar by typing in (a/100)/(b/2204.62) and clicking “Apply.”
Cost of caloric-equivalent meal (the second linked graph). Search for and select “Global price of Poultry.” From the “Edit Graph” panel, use the “Edit Line” tab to customize the data by applying the formula a/100. Next, from the “Edit Graph” panel, use the “Add Line” tab to search for and select “Global price of Soybeans.” Next, use the “Edit Line 2” tab to customize the data by applying the formula (a/2204.62)*2.93. Salt and flavor the graphs to taste by using the “Format” panel.

Suggested by Diego Mendez-Carbajo.

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