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Payment choice and currency use: Insights from two billion retail transactions

Zhu Wang and Alexander Wolman ()

Journal of Monetary Economics, 2016, vol. 84, issue C, 94-115

Abstract: Using three years of transactions data from a discount retailer with thousands of stores, we study payment variation along three dimensions: transaction size and location; weekly and monthly frequencies; and longer time horizons. In each case, we connect empirical patterns to theories of money demand and payments. We show that cross-sectional and time-series payment patterns are consistent with a theoretical framework in which individual consumers choose between cash and non-cash payments based on a threshold transaction size, and we evaluate factors that may account for the variation in threshold distributions across locations and time.

Keywords: Payment choice; Money demand; Consumer behavior (search for similar items in EconPapers)
Date: 2016
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Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

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