The Co-holding Puzzle: New Evidence from Transactional-Level Data

John Gathergood and Arna Olafsson

No 2022-18, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: Using detailed and highly disaggregated data on household finances, we examine the tendency of consumers to “co-hold” savings and debt simultaneously. The disaggregated nature of the data allows us to calculate co-holding at daily frequency. We find that coholding is rare and mostly occurs in short spells within the month, but is a persistent behavior among a subset of consumers. For this group, we find evidence in support of explanations for co-holding based upon functional mental accounting in which agents hold spending and saving accounts, while we find less support for rational explanations.

Keywords: co-holding; credit card puzzle; consumer credit; household finance (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-pay
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Related works:
Working Paper: The Co-holding Puzzle: New Evidence from Transaction-Level Data (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcdx:2022-18

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