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Payment choice and currency use: Insights from two billion retail transactions

Listed author(s):
  • Wang, Zhu
  • Wolman, Alexander L.

Using three years of transactions data from a discount retailer with thousands of stores, we study payment variation along three dimensions: transaction size and location; weekly and monthly frequencies; and longer time horizons. In each case, we connect empirical patterns to theories of money demand and payments. We show that cross-sectional and time-series payment patterns are consistent with a theoretical framework in which individual consumers choose between cash and non-cash payments based on a threshold transaction size, and we evaluate factors that may account for the variation in threshold distributions across locations and time.

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File URL: http://www.sciencedirect.com/science/article/pii/S0304393216301076
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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 84 (2016)
Issue (Month): C ()
Pages: 94-115

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Handle: RePEc:eee:moneco:v:84:y:2016:i:c:p:94-115
DOI: 10.1016/j.jmoneco.2016.10.005
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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