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Incorporating Trip-Chaining to Measuring Canadians’ Access to Cash

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  • Heng Chen
  • Hongyu Xiao

Abstract

Household mobility data can improve our measurement of access to cash. The existing literature typically assumes that households visit their nearest ABMs or financial institution branches from their homes, without combining cash withdrawals with other activities (i.e., on their way to shopping). However, the typical approach neglects two realistic features: The first is that, due to spatial agglomeration, cash access points could be co-located with popular points of interest, such as retail service centers; and, second, households could combine multiple trips, via trip-chaining, to reduce travel costs. Our paper employs smartphone data to construct an improved cash access metric by accounting for both spatial agglomeration and households’ travel patterns. We find that incorporating trip-chaining into the travel metric could show that travel costs are from 15% to 25% less than not incorporating trip-chaining and that the biggest decrease is driven by rural residents.

Suggested Citation

  • Heng Chen & Hongyu Xiao, 2025. "Incorporating Trip-Chaining to Measuring Canadians’ Access to Cash," Staff Working Papers 25-16, Bank of Canada.
    • Handle: RePEc:bca:bocawp:25-16
    DOI: 10.34989/swp-2025-16
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    References listed on IDEAS

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    1. Daniel Shoag & Stan Veuger, 2018. "Shops and the City: Evidence on Local Externalities and Local Government Policy from Big-Box Bankruptcies," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 440-453, July.
    2. Heng Chen & Daneal O’Habib & Hongyu Xiao, 2024. "How do Canadians perceive access to cash?," Staff Analytical Notes 2024-24, Bank of Canada.
    3. Couture, Victor & Dingel, Jonathan I. & Green, Allison & Handbury, Jessie & Williams, Kevin R., 2022. "JUE Insight: Measuring movement and social contact with smartphone data: a real-time application to COVID-19," Journal of Urban Economics, Elsevier, vol. 127(C).
    4. Scott R. Baker & Stephanie Johnson & Lorenz Kueng, 2021. "Shopping for Lower Sales Tax Rates," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(3), pages 209-250, July.
    5. Helmut Stix, 2020. "A spatial analysis of access to ATMs in Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q3/20, pages 39-59.
    6. Krüger, Malte & Seitz, Franz, 2025. "Costs of means of payment for consumers: Literature review and some sensitivity analyses," IMFS Working Paper Series 218, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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