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Are digital payments driven by wealth inequality? Evidence from analysis of the unified payments interface (UPI) adoption in India

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  • Gupta, Rajesh
  • Anand, Arjun
  • Gupta, Tanya

Abstract

Though the manifestation of wealth endowment in digital payments technology adoption ranges can have far-reaching socio-economic implications, it remains an understudied area. The unified payment interface (UPI), a dominant digital payment system in India, is examined in this study for the influence of wealth endowment on digital payments executed via UPI in India. Utilizing the Instrumental Variable Quantile Regression (IVQR) method alongside the smooth IVQR method on district-level data, this study addresses endogeneity and heterogeneous treatment effects. The results indicate that income inequality impacts digital payments with a pronounced effect in regions with higher UPI adoption rates.

Suggested Citation

  • Gupta, Rajesh & Anand, Arjun & Gupta, Tanya, 2025. "Are digital payments driven by wealth inequality? Evidence from analysis of the unified payments interface (UPI) adoption in India," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 1130-1141.
    • Handle: RePEc:eee:ecanpo:v:87:y:2025:i:c:p:1130-1141
    DOI: 10.1016/j.eap.2025.07.014
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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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