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Payment Habits during Covid-19: Evidence from High-Frequency Transaction Data

Author

Listed:
  • Dahlhaus Tatjana

    (Canadian Economic Analysis Department, 6315 Bank of Canada , 234 Wellington Street, Ottawa, ON, K1A 0G9, Canada)

  • Welte Angelika

    (Currency Department, 6315 Bank of Canada , 234 Wellington Street, Ottawa, ON K1A 0G9, Canada)

Abstract

The Covid-19 pandemic, in Canada and around the world, accelerated trends toward non-cash payments. In this paper, we assess the impact of high-frequency fluctuations in the severity of the pandemic on payment behaviour. These fluctuations are measured by daily changes in restrictions (“stringency”) and reported case counts. Our main measures of payment habits are the ratios of the value and transaction counts of cash withdrawals to debit card payments. Econometrically, we use local projections to estimate the effects on payment habits. We find evidence that consumer behaviour adjusted during the pandemic: consumers withdrew less cash relative to card payment and avoided frequent trips for cash withdrawals and point-of-sale purchases through higher transaction amounts. Based on our modelling, once stringency measures eased and case counts receded, cash use partially recovered, although not to pre-pandemic levels.

Suggested Citation

  • Dahlhaus Tatjana & Welte Angelika, 2025. "Payment Habits during Covid-19: Evidence from High-Frequency Transaction Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 245(6), pages 599-621.
    • Handle: RePEc:jns:jbstat:v:245:y:2025:i:6:p:599-621:n:1002
    DOI: 10.1515/jbnst-2024-0013
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    References listed on IDEAS

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    1. Knut Are Aastveit & Tuva Marie Fastbø & Eleonora Granziera & Kenneth Sæterhagen Paulsen & Kjersti Næss Torstensen, 2024. "Nowcasting Norwegian household consumption with debit card transaction data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 39(7), pages 1220-1244, November.
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    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates

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