The Determinants of Household's Bank Switching

39 Pages Posted: 17 Aug 2014 Last revised: 12 Nov 2015

See all articles by Marianna Brunetti

Marianna Brunetti

Dept. Economics and Finance, University of Rome Tor Vergata; CEFIN

Rocco Ciciretti

Tor Vergata University of Rome - Department of Economics and Finance

Ljubica Djordjevic

Goethe University Frankfurt

Date Written: October 2015

Abstract

We investigate the determinants of households’ bank switching in 2006-2012 period exploiting a unique representative dataset from Bank of Italy Survey on Household Income and Wealth that follows the households and their bank(s) over time. Focusing on the features of the household-bank relationship, we find that using more than a single bank, as well as the intensity (number of services used), and the scope (bank services used) of the relationship with the main bank also play a role in shaping the households’ decision to switch. Moreover, we find that this decision is strongly and positively correlated with both taking out and paying off a mortgage. We also find that education and financial literacy both matter for this decision, albeit with opposite effects and that, as expected, competition plays a role by increasing switching.

Keywords: household-bank relationship, switching cost, bank services

JEL Classification: G21; D14

Suggested Citation

Brunetti, Marianna and Ciciretti, Rocco and Djordjevic, Ljubica, The Determinants of Household's Bank Switching (October 2015). CEIS Working Paper No. 322. Available at SSRN: https://ssrn.com/abstract=2476971 or http://dx.doi.org/10.2139/ssrn.2476971

Marianna Brunetti

Dept. Economics and Finance, University of Rome Tor Vergata ( email )

Via Columbia, 2
Rome, Lazio 00133
Italy

HOME PAGE: http://economia.uniroma2.it/en/def/faculty/178/brunetti-marianna

CEFIN ( email )

via Berengario 51
Modena, modena I-41100
Italy

Rocco Ciciretti (Contact Author)

Tor Vergata University of Rome - Department of Economics and Finance ( email )

Via Columbia, 2
Roma, 00133
Italy
+39 06 72595925 (Phone)

HOME PAGE: http://www.roccociciretti.com/

Ljubica Djordjevic

Goethe University Frankfurt ( email )

Theodor-W-Adorno platz 3
Frankfurt am Main, 60323
Germany

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