The Boston Fed study of consumer behavior and payment choice: a survey of Federal Reserve System employees
The way people pay for goods and services is changing dramatically, but little data and research on consumer behavior and payment choice are publicly available. This paper describes the results of a survey of payment behavior and attitudes taken by Federal Reserve employees in 2004. Major contributions of the survey are that it asks: 1) why payment choices are made; 2) why individual payment behavior has changed; and 3) why individual-specific payment characteristics matter for payment choice. Although the survey is not statistically representative of U.S. consumers, and thus may not provide accurate estimates of aggregate U.S. payment trends, many results are consistent with data from more representative payment surveys. For example, the data show a trend away from check-writing and toward electronic and emerging payment methods, but the choice of payment method depends on the type of payment, amount of payment, and other complex factors. Also, cost, convenience, and control over timing are the most important characteristics determining respondents' adoption and use of payment methods. We find that payment characteristics vary widely across respondents, partly because of inherent heterogeneity but perhaps also because of measurement error, misperception, or inadequate information (lack of consumer education). Cross-sectional evidence shows that respondents tend to use payment methods in a manner broadly consistent with their reported assessments of the payment characteristics.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.bos.frb.org/
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- W. Scott Frame & Lawrence White, 2002.
"Empirical Studies of Financial Innovation: Lots of Talk, Little Action?,"
02-18, New York University, Leonard N. Stern School of Business, Department of Economics.
- W. Scott Frame & Lawrence J. White, 2004. "Empirical Studies of Financial Innovation: Lots of Talk, Little Action?," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 116-144, March.
- W. Scott Frame & Lawrence J. White, 2002. "Empirical studies of financial innovation: lots of talk, little action?," Working Paper 2002-12, Federal Reserve Bank of Atlanta.
- Michelle L. Barnes & Jose Lopez, 2005.
"Alternative measures of the Federal Reserve banks' cost of equity capital,"
Working Paper Series
2005-06, Federal Reserve Bank of San Francisco.
- Barnes, Michelle L. & Lopez, Jose A., 2006. "Alternative measures of the Federal Reserve Banks' cost of equity capital," Journal of Banking & Finance, Elsevier, vol. 30(6), pages 1687-1711, June.
- Michelle L. Barnes & Jose A. Lopez, 2005. "Alternative measures of the Federal Reserve banks' cost of equity capital," Public Policy Discussion Paper 05-2, Federal Reserve Bank of Boston.
- Lucia Dunn & Tufan Ekici & Paul J. Lavrakas & Jeffery A. Stec, 2004. "An Index to Track Credit Card Debt and Predict Consumption," Working Papers 04-04, Ohio State University, Department of Economics.
- Nicole Jonker, 2005. "Payment Instruments as Perceived by Consumers - a Public Survey," DNB Working Papers 053, Netherlands Central Bank, Research Department.
- Williamson, Stephen D., 2003. "Payments systems and monetary policy," Journal of Monetary Economics, Elsevier, vol. 50(2), pages 475-495, March.
- Geoffrey R. Gerdes & Jack K . Walton II, 2002. "The use of checks and other noncash payment instruments in the United States," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Aug, pages 360-374.
- Geoffrey R. Gerdes & Jack K. Walton II & May X. Liu & Darrel W. Parke, 2005. "Trends in the use of payment instruments in the United States," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Spr, pages 180-201.
- Sendhil Mullainathan & Richard H. Thaler, 2000. "Behavioral Economics," NBER Working Papers 7948, National Bureau of Economic Research, Inc.
- Sandy Krieger & Michele Braun, 2005. "Improving business payments by asking what corporations really want," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 11(May).
- Stacey L. Schreft, 2006.
"How and why do consumers choose their payment methods?,"
Research Working Paper
RWP 06-04, Federal Reserve Bank of Kansas City.
- Stacey L. Schreft, 2005. "How and why do consumers choose their payment methods?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston.
- Stephan Meier & Charles Sprenger, 2007. "Impatience and credit behavior: evidence from a field experiment," Working Papers 07-3, Federal Reserve Bank of Boston.
- Katy Jacob & Jennifer Tescher & Sabrina Su & Sherrie L.W. Rhine, 2005. "Stored-value cards: challenges and opportunities for reaching emerging markets," Proceedings 965, Federal Reserve Bank of Chicago.
- Humphrey, David B., 2004. "Replacement of cash by cards in US consumer payments," Journal of Economics and Business, Elsevier, vol. 56(3), pages 211-225.
- Taehyung Kim & Lucia F. Dunn & Gene E. Mumy, 2005. "Bank Competition and Consumer Search over Credit Card Interest Rates," Economic Inquiry, Western Economic Association International, vol. 43(2), pages 344-353, April.
- Byoung-Min Kim & Richard Widdows & Tansel Yilmazer, 2005. "The determinants of consumers’ adoption of Internet banking," Conference Series ; [Proceedings], Federal Reserve Bank of Boston.
- Arthur B. Kinneckell, 1997. "Who uses electronic banking? results from the 1995 Survey of Consumer Finances," Proceedings 534, Federal Reserve Bank of Chicago.
When requesting a correction, please mention this item's handle: RePEc:fip:fedbpp:07-1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catherine Spozio)
If references are entirely missing, you can add them using this form.