The Determinants of Household's Bank Switching

Marianna Brunetti, Rocco Ciciretti and Ljubica Djordjevic (l.djordjevic@tilburguniversity.edu)
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Ljubica Djordjevic: Department of Finance, Tilburg University

No 322, CEIS Research Paper from Tor Vergata University, CEIS

Abstract: We investigate the determinants of households’ bank switching in 2006-2012 period exploiting a unique representative dataset from Bank of Italy Survey on Household Income and Wealth that follows the households and their bank(s) over time. Focusing on the features of the household-bank relationship, we find that using more than a single bank, as well as the intensity (number of services used), and the scope (bank services used) of the relationship with the main bank also play a role in shaping the households’ decision to switch. Moreover, we find that this decision is strongly and positively correlated with both taking out and paying off a mortgage. We also find that education and financial literacy both matter for this decision, albeit with opposite effects and that, as expected, competition plays a role by increasing switching.

Keywords: household-bank relationship; switching cost; bank services (search for similar items in EconPapers)
JEL-codes: D14 G21 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2014-08-06, Revised 2015-11-11
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The determinants of household’s bank switching (2016)
Working Paper: The Determinants of Household's Bank Switching (2015)
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