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Why Households Don’t Have Checking Accounts

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  • Jeanne M. Hogarth
  • Chris E. Anguelov
  • Jinkook Lee

Abstract

Using the Surveys of Consumer Finances from 1992 to 1998, this article explores the reasons for not having a checking account, including product design, human capital, motivation for having a checking account, and institutional factors. Focusing primarily on reasons related to product design, we found that smaller family units, unemployed people, those with shorter planning horizons, older people, families with higher levels of education, those who have some other bank account, and those with better credit histories were more likely to give reasons related to product design than were their counterparts. Reasons for not having an account have changed over time, shifting away from product design factors toward other reasons. We suggest potential responses for firms, community educators, and policy makers.

Suggested Citation

  • Jeanne M. Hogarth & Chris E. Anguelov & Jinkook Lee, 2003. "Why Households Don’t Have Checking Accounts," Economic Development Quarterly, , vol. 17(1), pages 75-94, February.
    • Handle: RePEc:sae:ecdequ:v:17:y:2003:i:1:p:75-94
    DOI: 10.1177/0891242402239199
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    References listed on IDEAS

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    1. Annamaria Lusardi, 2000. "Explaining Why So Many Households Do Not Save," Working Papers 0001, Harris School of Public Policy Studies, University of Chicago.
    2. Bassett, William F. & Fleming, Michael J. & Rodrigues, Anthony P., 1998. "How Workers Use 401(K) Plans: The Participation, Contribution, and Withdrawal Decisions," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(2), pages 263-289, June.
    3. John P. Caskey, 2001. "Reaching out to the unbanked," Proceedings 786, Federal Reserve Bank of Chicago.
    4. Thaler, Richard H, 1994. "Psychology and Savings Policies," American Economic Review, American Economic Association, vol. 84(2), pages 186-192, May.
    5. Joseph J. Doyle & Jose A. Lopez & Marc R. Saidenberg, 1998. "How effective is lifeline banking in assisting the 'unbanked'?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 4(Jun).
    6. Arthur B. Kennickell & Martha Starr-McCluer & Annika E. Sunden, 1997. "Family Finance in the U.S.: Recent Evidence from the Survey of Consumer Finances," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 83(1), pages .1-24, January.
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    Cited by:

    1. Annamaria Lusardi & Olivia S. Mitchell, 2008. "Planning and Financial Literacy: How Do Women Fare?," American Economic Review, American Economic Association, vol. 98(2), pages 413-417, May.
    2. Katie Fitzpatrick, 2015. "The effect of bank account ownership on credit and consumption: Evidence from the UK," Southern Economic Journal, John Wiley & Sons, vol. 82(1), pages 55-80, July.
    3. Kevin X.D. Huang & Frank Caliendo, 2007. "Rationalizing Seven Consumption-Saving Puzzles in a Unified Framework," Vanderbilt University Department of Economics Working Papers 0716, Vanderbilt University Department of Economics.
    4. Craig Gundersen & David R. Just & Katie Fitzpatrick, 2017. "Bank Accounts, Nonbank Financial Transaction Products, and Food Insecurity among Households with Children," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(3), pages 631-658, November.

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