The Boston Fed Study of Consumer Behavior and Payment Choice: A Survey of Federal Reserve System Employees

Abstract

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. 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 checkwriting 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. Terms of use: Documents in JEL Classifications: D12, D14, E41, C81

Why are (Some) Consumers (Finally) Writing Fewer Checks?: The Role of Payment Characteristics

“…Demographic attributes were found to influence consumer payment behavior, but heterogeneity in payment behavior within demographic groups can be large (see Benton, Blair, Crowe and Schuh 2007) and substantial part of the variation in consumer payment use remains unexplained. Therefore including the characteristics of the payment methods and consumer perception of those methods could supplement or even replace the effect of demographics.…”

“…check volume has severely affected Federal Reserve business operations, reducing processing sites by 51 percent and total employment by 15 percent (Benton, Blair, Crowe, and Schuh 2007).…”

“…Our data come from a convenience sample of Federal Reserve employees in 2004, which were surveyed as part of a consumer payment research program at the Boston Fed (see Benton et al 2007). We also provide evidence from a nationally representative follow-up survey conducted by the AARP in 2006.…”

Why are (some) consumers (finally) writing fewer checks? The role of payment characteristics

“…Thus, assuming no change in the average inflation-adjusted amount per check, the use of checks as payment method has been declining for much longer than the absolute volume of checks. 7 This core processed volume excludes a small proportion of highly variable checks that were affected by special factors; for more details, see Benton et al (2007).…”

Measuring Consumer Expenditures With Payment Diaries

“…(1) adoption of bank accounts and payment instruments (including cash holdings) and (2) recall-based use of payment instruments defined 19. For more information, see Benton et al (2007), Gerdes (2008), and Schuh and Stavins (2010). 20.…”