An empirical analysis of euro cash payments
If the denominational structure of the euro is used in an optimal way, there should be no preferences for using certain coins and notes. In Kippers et al. (2003) it is documented that the Dutch public did have certain preferences concerning the Dutch guilder, in the sense that some notes and coins were used less often than expected. With the advent of the euro, it is now of interest to examine whether these preferences also exist for euro coins and notes, also as the denominational structure of the guilder was 1-2?-5, while for the euro it is now 1-2-5. In this paper we use two new and rather unique data sets for the Netherlands to empirically examine if the euro range is used in an optimal way. Using a statistical model, specifically designed for this purpose, we find that the Dutch public does not seem to have preferences for certain denominations. Hence, the task of paying with cash has become easier for Dutch consumers.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert B. Avery & Gregory E. Elliehausen & Arthur B. Kennickell & Paul A. Spindt, 1986. "The use of cash and transaction accounts by American families," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Feb, pages 87-108.
- Wynne, Mark A., 1997.
"More on optimal denominations for coins and currency,"
Elsevier, vol. 55(2), pages 221-225, August.
- Mark A. Wynne, 1997. "More on optimal denominations for coins and currency," Working Papers 9702, Federal Reserve Bank of Dallas.
- Jeanine Kippers & Erjen Nierop & Richard Paap & Philip Hans Franses, 2003.
"An Empirical Study of Cash Payments,"
Netherlands Society for Statistics and Operations Research, vol. 57(4), pages 484-508.
- Cramer, J. S., 1983. "Currency by denomination," Economics Letters, Elsevier, vol. 12(3-4), pages 299-303.
- van Hove, Leo & Heyndels, Bruno, 1996. "On the optimal spacing of currency denominations," European Journal of Operational Research, Elsevier, vol. 90(3), pages 547-552, May.
- Sheri M. Markose & Yiing Jia Loke, 2003.
"Network Effects On Cash-Card Substitution In Transactions And Low Interest Rate Regimes,"
Royal Economic Society, vol. 113(487), pages 456-476, 04.
- 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.
- David Humphrey & Moshe Kim & Bent Vale, 1998.
"Realizing the gains from electronic payments: costs, pricing, and payment choice,"
586, Federal Reserve Bank of Chicago.
- Humphrey, David B & Kim, Moshe & Vale, Bent, 2001. "Realizing the Gains from Electronic Payments: Costs, Pricing, and Payment Choice," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 216-34, May.
- Boeschoten, W C & Fase, M M G, 1989. "The Way We Pay with Money," Journal of Business & Economic Statistics, American Statistical Association, vol. 7(3), pages 319-26, July.
- Sumner, Scott, 1993. "Privatizing the Mint," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(1), pages 13-29, February.
- Leo van Hove, 2004. "Electronic Purses in Euroland: Why do Penetration and Usage Rates differ?," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
- Telser, L. G., 1995. "Optimal denominations for coins and currency," Economics Letters, Elsevier, vol. 49(4), pages 425-427, October.
- Leo Van Hove, 2004. "Electronic Purses in Euroland: Why do Penetration and Usage Rates differ?," SUERF Studies, SUERF - The European Money and Finance Forum, number 2004/4 edited by Morten Balling.
- Van Hove, Leo, 2001. "Optimal Denominations for Coins and Bank Notes: In Defense of the Principle of Least Effort," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(4), pages 1015-21, November.
When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:51:y:2007:i:8:p:1985-1997. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.