The Impact of Technological Change on the Currency Behavior of Households: An Empirical Cross-section Study

Daniels, Kenneth N.; Murphy, Neil B.

doi:10.2307/2077952

Cited by 27 publications

(24 citation statements)

References 15 publications

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“…More recently, Lippi and Secchi (2009) used information on the availability of ATM cards and bank branches (accounts) and showed the negative and often signi…cant relationship between Italian cash holding and improvements in …nancial technology. The negative relationship was also reported by Lieberman (1977) and also Daniels and Murphy (1994) and Attanasio et al (2002) using ATM-related data as a proxy for …nancial innovation.…”

Section: General Statistical Modelsupporting

confidence: 55%

Financial innovation and regional money

Nagayasu

2012

Applied Economics

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This paper studies the e¤ect that …nancial innovation, which seems very prominent in recent years, has on money. Using Japanese regional data and the money demand speci…cation, we …rst provide evidence of instability in the simple money-output relationship. However, when this relationship is extended to include a proxy for a comprehensive measure of …nancial innovation, the model is found to be stable. Furthermore, consistent with economic theory, evidence is obtained of …nancial innovation leading to decreased demand for liquid …nancial assets. In this respect, demand deposits seem to possess very similar characteristics to cash in Japan in recent years. JEL Classi…cation: E41

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Section: General Statistical Modelsupporting

confidence: 55%

Financial innovation and regional money

Nagayasu

2012

Applied Economics

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“…Indeed, previous literature indicates that older people hold and use more cash while young consumers are more likely to use new payment technologies (e.g., Daniels and Murphy, 1994;Boeschoten, 1998;Carow and Staten, 1999;Stavins, 2001;Hayashi and Klee, 2003).…”

Section: Age Income and Educationmentioning

confidence: 99%

“…8 Although our econometric analysis is a simple first step toward what ultimately can be done with the diary data, it nevertheless generates a few notable results. In the logit estimation of 8 We do not attempt to estimate models of consumer demand for cash, which is the subject of another closelyrelated branch of the literature including Daniels and Murphy (1994), Mulligan and Sala-i-Martin (2000), Attanasio, Guiso, and Jappelli (2002), Bounie and Francois (2008), Lippi and Secchi (2009), and Briglevics and Schuh (2013b). These studies rely on consumer surveys, rather than diaries, to collect cash-related data on consumers, and generally do not attempt to estimate consumer demand for other payment instruments.…”

mentioning

confidence: 99%

Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data

et al. 2014

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. iii Terms of use: Documents in AbstractWe measure consumers' use of cash by harmonizing payment diary surveys from seven countries. The seven diary surveys were conducted in 2009 (Canada), 2010 (Australia), 2011 (Austria, France, Germany and the Netherlands), and 2012 (the United States). Our paper finds cross-country differences -for example, the level of cash usage differs across countries. Cash has not disappeared as a payment instrument, especially for low-value transactions. We also find that the use of cash is strongly correlated with transaction size, demographics, and point-of-sale characteristics such as merchant card acceptance and venue.

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“…A calculation for Italy following the same methodology yields about 20 and 17 days in 1993 and 1995, respectively. 5 An alternative source for the average ATM withdrawal, based on banks' reports, can be computed using Tables 12.1 and 13.1 in the ECB Blue Book (2006). These values are similar, indeed somewhat smaller, than the corresponding values from the household data (see the Online Appendix L1).…”

mentioning

confidence: 99%

“…to derive equation (5). The only decision that the agent must make is whether to remain unmatched, or to pay the fixed cost b and be matched with a financial intermediary.…”

mentioning

confidence: 99%

Financial Innovation and the Transactions Demand for Cash

Álvarez

Lippi

2007

113

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We thank Daron Acemoglu for constructive criticisms on a previous version of the paper. We also thank Alessandro Secchi for his guidance in the construction and analysis of the database. We benefited from the comments of Manuel Arellano, V.V. ABSTRACTWe document cash management patterns for households that are at odds with the predictions of deterministic inventory models that abstract from precautionary motives. We extend the Baumol-Tobin cash inventory model to a dynamic environment that allows for the possibility of withdrawing cash at random times at a low cost. This modification introduces a precautionary motive for holding cash and naturally captures developments in withdrawal technology, such as the increasing diffusion of bank branches and ATM terminals. We characterize the solution of the model and show that qualitatively it is able to reproduce the empirical patterns. Estimating the structural parameters we show that the model quantitatively accounts for key features of the data. The estimates are used to quantify the expenditure and interest rate elasticity of money demand, the impact of financial innovation on money demand, the welfare cost of inflation, the gains of disinflation and the benefit of ATM ownership.

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The Impact of Technological Change on the Currency Behavior of Households: An Empirical Cross-section Study

Cited by 27 publications

References 15 publications

Financial innovation and regional money

Financial innovation and regional money

Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data

Financial Innovation and the Transactions Demand for Cash

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