Alternative Methods for Studying Consumer Payment Choice

20 Pages Posted: 1 Jun 2018 Last revised: 21 Jul 2018

Oz Shy


Date Written: July 10, 2018


The study of consumer payment choice at the point of sale (POS) involves a classification of payment methods such as cash, credit cards, debit cards, prepaid cards, and paper checks. I describe alternative methods for studying consumer payment choice using some machine learning techniques applied to consumer diary survey data. The results are then compared to the more traditional logistic regression methods. Machine learning techniques may have advantages in the actual prediction of payment choice, in visualization of the results, and when applied to high-dimensional data. The logistic regression approach has an advantage if the goal is to interpret the probability that a buyer uses a specific payment instrument.

Keywords: Studying consumer payment choice, point of sale, statistical learning, machine learning

JEL Classification: C19, E42

Suggested Citation

Shy, Oz, Alternative Methods for Studying Consumer Payment Choice (July 10, 2018). Available at SSRN: or

Oz Shy (Contact Author)

Independent ( email )

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