more advanced - - and more feasible - - in some types of activities than in others. in the payment services areas, the reserve banks have measured their performance through various financial measures for many years. for example, the monetary control act of 1980 imposes market discipline on the federal reserve by requiring it fully to cover its costs of providing services to depository institutions, and compliance with this requirement is monitored closely. frequently private competitors provide or could provide these services, and our ability to recover our costs, adjusted to include a factor for imputed profits, taxes and cost of capital, help determine whether it is beneficial for the economy that we stay in the business. in addition, the federal reserve has traditionally measured unit costs for its financial services and has developed various indices that allow a reserve bank to measure its cost performance over time and in comparison to other reserve banks. private sector benchmarks are also being developed. the federal reserve also tracks quality measures for many reserve bank services. finally, the federal reserve monitors the progress of the reserve banks against various strategic objectives. similarly, in bank supervision, the federal reserve has long used a variety of measures of the effectiveness of its examination process, but the measurement challenge has taken on new importance as supervision becomes more automated and more focused on analyzing risk. to meet this challenge, the federal reserve is working closely with other regulators to standardize and improve examination techniques, and has established a steering committee to oversee implementation of a risk - focused examination program and to design a management information system that will permit the board to evaluate better the efficient use of examination resources among the reserve banks. for instance, supervisory data are used to determine in advance of on - site examinations what factors ( camels rating, asset size, location, and loan types ) are most predictive as to the resources needed for examinations, and which institutions, particular lending areas or other service lines may require more intensive review. such programs are low - cost because they use information that we already collect, and are effective and cost - saving because they provide a systematic way to plan and prioritize our time and resources. in other areas, such as the research and statistical analysis on which monetary policy is based, performance measurement is - - and will remain - - far more problematic. the performance of the economy itself is not so hard to measure and right now is highly positive. but it is not clear how much of the economic progress can be attributed to monetary policy, and even less clear how particular monetary policy actions are related to

the most prominent examples of for example, the survey of consumer finances ( scf ) data show that the average wealth of individuals in low - and moderate - income areas declined on a percentage basis more than that in higher - income areas ( 21 percent versus 17 percent ). see the 2007 - 09 scf panel data. raven molloy ( 2013 ), “ long - term vacant housing units : an aggregate view, ” speech delivered at “ renters, homeowners, and investors : the changing profile of communities, ” a conference sponsored by board of governors of the federal reserve system and federal reserve banks of philadelphia and cleveland, washington, february 26. alan berube ( 2012 ), “ the continuing evolution of american poverty and its implications for community development ( pdf ), ” in federal reserve bank of san francisco and low income investment fund, investing in what works for america ’ s communities : essays on people, place, and purpose ( san francisco : frbsf and liif ), pp. 55 – 71. bis central bankers ’ speeches well - meaning but misguided efforts to revitalize decaying inner - city neighborhoods. in practice, these policies often devastated neighborhood cohesion, leading their critics to argue for local, bottom - up solutions. perhaps the most influential critique of urban renewal and top - down planning was jane jacobs ’ s 1961 book, death and life of great american cities. 4 in that book she celebrated the complexity and organic development of city neighborhoods in which intricate social networks enhance safety, quality of life, and economic opportunity. in jacobs ’ s view, a police force was not as effective at maintaining order as a neighborhood filled with “ public actors ” such as storekeepers, doormen, and interested neighbors acting as street watchers at all hours. the development of this sort of community self - monitoring is most likely to emerge, she argued, in neighborhoods with a rich mixture of activities taking place in buildings of varying age, character, and use. for the most part, social science research has vindicated jacobs ’ s perspective. for example, sociologists studying community resilience in the wake of natural disasters mapped deaths caused by an extreme heat wave in chicago in 1995. 5 they found, not surprisingly, that death rates were higher in poor areas where air conditioners were scarce. but they also noticed a remarkable difference in the fatality rate in two adjacent neighborhoods – englewood and auburn grisham – on chicago ’ s south side. these neighborhoods