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How Do Debit Cards Affect Cash Demand? Survey Data Evidence

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  • Helmut Stix
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    Abstract

    This paper analyzes how EFT-POS payments and ATM withdrawals affect cash demand. In particular, survey data about Austrian individuals are employed to estimate a purse cash demand equation, which takes account of sample selection effects. The results reveal that purse cash demand is significantly and sizably affected by debit card usage and that there are significant differences in cash demand for individuals with different debit card usage frequencies. In addition, the effect of EFT-POS payments on cash use at the point-of-sale is discussed on the basis of data from a consumer transaction survey. Copyright Kluwer Academic Publishers 2004

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    File URL: http://hdl.handle.net/10.1007/s10663-004-1079-y
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    Bibliographic Info

    Article provided by Springer in its journal Empirica.

    Volume (Year): 31 (2004)
    Issue (Month): 2 (June)
    Pages: 93-115

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    Handle: RePEc:kap:ecopln:v:31:y:2004:i:2:p:93-115

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    Web page: http://www.springerlink.com/link.asp?id=113294

    Related research

    Keywords: Cash demand; payment cards; cash substitution;

    References

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    1. Sheri M. Markose & Yiing Jia Loke, 2000. "Network effects on Cash-Card Substitution in Transactions and Low Interest Rate Regimes," Economics Discussion Papers 507, University of Essex, Department of Economics.
    2. John V. Duca & William C. Whitesell, 1991. "Credit cards and money demand: a cross-sectional study," Research Paper 9112, Federal Reserve Bank of Dallas.
    3. Orazio Attanasio & Luigi Guiso & Tullio Jappelli, 1998. "The Demand for Money, Financial Innovation, and the Welfare Cost of Inflation: An Analysis with Households' Data," CSEF Working Papers 03, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. Jussi Snellman & Jukka Vesala & David Humphrey, 2001. "Substitution of Noncash Payment Instruments for Cash in Europe," Journal of Financial Services Research, Springer, vol. 19(2), pages 131-145, April.
    5. Laura Rinaldi, . "Payment Cards and Money Demand in Belgium," International Economics Working Papers Series ces0116, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, International Economics.
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    Cited by:
    1. Hyytinen, Ari & Takalo, Tuomas, 2004. "Multihoming in the Market for Payment Media: Evidence from Young Finnish Consumers," Discussion Papers 893, The Research Institute of the Finnish Economy.
    2. Ardizzi, Guerino, 2013. "Card versus cash: empirical evidence of the impact of payment card interchange fees on end users’ choice of payment methods," MPRA Paper 48088, University Library of Munich, Germany, revised 25 May 2013.
    3. Guerino Ardizzi & Eleonora Iachini, 2013. "Why are payment habits so heterogeneous across and within countries? Evidence from European countries and Italian regions," Questioni di Economia e Finanza (Occasional Papers) 144, Bank of Italy, Economic Research and International Relations Area.
    4. von Kalckreuth, Ulf & Schmidt, Tobias & Stix, Helmut, 2011. "Using cash to monitor liquidity: Implications for payments, currency demand and withdrawal behavior," Discussion Paper Series 1: Economic Studies 2011,22, Deutsche Bundesbank, Research Centre.
    5. Lee, Chien Chiang & Chang, Chun Ping, 2012. "The Demand for Money in China: A Reassessment Using the Bounds Testing Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 74-94, March.
    6. Ulf Kalckreuth & Tobias Schmidt & Helmut Stix, 2014. "Choosing and using payment instruments: evidence from German microdata," Empirical Economics, Springer, vol. 46(3), pages 1019-1055, May.
    7. Balázs Égert & Doris Ritzberger-Grünwald & Maria Antoinette Silgoner, 2004. "Inflation Differentials in Europe: Past Experience and Future Prospects," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 47–72.
    8. Francesco Lippi & Alessandro Secchi, 2008. "Technological change and the households' demand for currency," EIEF Working Papers Series 0801, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2008.
    9. Hiroshi Fujiki & Migiwa Tanaka, 2009. "Demand for Currency, New Technology and the Adoption of Electronic Money: Evidence Using Individual Household Data," IMES Discussion Paper Series 09-E-27, Institute for Monetary and Economic Studies, Bank of Japan.

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