EconPapers    
Economics at your fingertips  
 

Cash remains top-of-wallet! International evidence from payment diaries

Carlos Alberto Arango, Yassine Bouhdaoui, David Bounie, Martina Eschelbach and Lola Hernandez

Economic Modelling, 2018, vol. 69, issue C, 38-48

Abstract: In recent years, many studies have emphasized the cost-saving potential of electronic payments. Yet, cash is still heavily used to pay for point-of-sale transactions in many developed economies. We introduce a model of optimal cash holdings and payments that exploits survey payment diaries from Austria, Canada, France, Germany, the Netherlands and the United States. Our results provide evidence that differences in incentives, such as the relative cost of cards compared with cash, and differences in ATM withdrawal costs, are key factors explaining why cash remains top-of-wallet across many developed economies. Indeed, we show that once obtained, cash goes first because it ”burns” in consumers’ wallets.

Keywords: Cash management; Money demand; Payment instruments; ATM access (search for similar items in EconPapers)
JEL-codes: C61 E41 E42 E47 E58 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999317301670
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Cash remains top-of-wallet! International evidence from payment diaries (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:69:y:2018:i:c:p:38-48

DOI: 10.1016/j.econmod.2017.09.002

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-31
Handle: RePEc:eee:ecmode:v:69:y:2018:i:c:p:38-48