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How do people pay rent?

Listed author(s):
  • Zhang, David Hao

    ()

    (Harvard University)

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    Using data from the 2014 Boston Fed Bill Payment Experiment and the 2014 Survey of Consumer Payment Choice (SCPC), we investigate how households pay their rent. We find that the dominant methods for paying rent are cash (22 percent), check (42 percent), and money order (16 percent). Electronic methods are still rarely used, at 8 percent for bank account number payment and 7 percent for online banking bill payment, and less than 2 percent for debit and credit cards. Compared with other large bill payments of more than $200, rental payments are much more likely to be made with paper-based methods than with electronic methods and are much less likely to be automatic, despite the recent attempts by start-ups to make it easier for landlords to accept electronic payments. Check and electronic methods are more frequently used for higher-valued transactions and by those with higher income and education.

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    Paper provided by Federal Reserve Bank of Boston in its series Research Data Report with number 16-2.

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    Length: 20 pages
    Date of creation: 13 Jun 2016
    Handle: RePEc:fip:fedbdr:16-2
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    1. Klee, Elizabeth, 2008. "How people pay: Evidence from grocery store data," Journal of Monetary Economics, Elsevier, vol. 55(3), pages 526-541, April.
    2. Scott Schuh & Joanna Stavins, 2012. "How consumers pay: adoption and use of payments," Working Papers 12-2, Federal Reserve Bank of Boston.
    3. Sergei Koulayev & Marc Rysman & Scott Schuh & Joanna Stavins, 2016. "Explaining adoption and use of payment instruments by US consumers," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 293-325, 05.
    4. Ching, Andrew T. & Hayashi, Fumiko, 2010. "Payment card rewards programs and consumer payment choice," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1773-1787, August.
    5. Michael Cohen & Marc Rysman, 2012. "Payment choice with consumer panel data," Working Papers 13, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    6. Greene, Claire & Rysman, Marc & Schuh, Scott & Shy, Oz, 2014. "Costs and benefits of building faster payment systems: the U.K. experience and implications for the United States," Current Policy Perspectives 14-5, Federal Reserve Bank of Boston.
    7. Jean‐Charles Rochet & Jean Tirole, 2011. "Must‐Take Cards: Merchant Discounts And Avoided Costs," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 462-495, 06.
    8. Michael D. Hurd & Susann Rohwedder, 2010. "Effects of the Financial Crisis and Great Recession on American Households," NBER Working Papers 16407, National Bureau of Economic Research, Inc.
    9. Steven Sexton, 2015. "Automatic Bill Payment and Salience Effects: Evidence from Electricity Consumption," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 229-241, May.
    10. Benjamin Edelman & Julian Wright, 2015. "Price Coherence and Excessive Intermediation," The Quarterly Journal of Economics, Oxford University Press, vol. 130(3), pages 1283-1328.
    11. Arango, Carlos & Huynh, Kim P. & Sabetti, Leonard, 2015. "Consumer payment choice: Merchant card acceptance versus pricing incentives," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 130-141.
    12. Shy, Oz, 2013. "How many cards do you use?," Working Papers 13-13, Federal Reserve Bank of Boston.
    13. Wang, Zhu & Wolman, Alexander L., 2014. "Payment Choice and the Future of Currency: Insights from Two Billion Retail Transactions," Working Paper 14-9, Federal Reserve Bank of Richmond.
    14. Oz Shy & Zhu Wang, 2011. "Why Do Payment Card Networks Charge Proportional Fees?," American Economic Review, American Economic Association, vol. 101(4), pages 1575-1590, June.
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