Going Cashless: Government’s Point Reward Program vs. COVID-19

Toshitaka Sekine, Toshiaki Shoji and Tsutomu Watanabe
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Toshiaki Shoji: Seikei University
Tsutomu Watanabe: University of Tokyo

No CARF-F-538, CARF F-Series from Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo

Abstract: Using credit card transaction data, we examine the impacts of two successive events that promoted cashless payments in Japan: the government’s program and the COVID-19 pandemic. We find that the number of card users was 9-12 percent higher in restaurants that participated in the program than those that did not. We present a simple framework accounting for the spread of cashless payments. Our model predicts that the impact of the policy intervention diminished as the use of cashless payments increased, which accords well with Japan’s COVID-19 experience. The estimated impact of COVID-19 was around two-thirds of that of the program.

Pages: 33
Date: 2022-06
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