Low-Income Consumers and Payment Choice

Oz Shy ()

No 2020-3, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: Low-income consumers are not only constrained with spending, but also with the type and variety of payment methods available to them. Using a representative sample of the U.S. adult population, this paper analyzes the low possession (adoption) of credit and debit cards among low-income consumers who are also unbanked. Using a random utility model, I estimate the potential welfare gains associated with policy options suggested in the literature to provide subsidized and unsubsidized debit cards to this consumer population.

Keywords: consumer payment choice; household income; diversity; unbanked consumers; random utility analysis; unbanked; financial inclusion; consumer surveys; consumer behavior (search for similar items in EconPapers)
JEL-codes: D90 E42 (search for similar items in EconPapers)
Pages: 16
Date: 2020-02-01, Revised 2020-02-01
New Economics Papers: this item is included in nep-ban, nep-fle, nep-mac, nep-pay and nep-upt
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DOI: 10.29338/wp2020-03

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