Low-Income Consumers and Payment Choice
16 Pages Posted: 8 Mar 2020
Date Written: February 11, 2020
Low-income consumers are not only constrained with spending, but also with the type and variety of payment methods available to them. Using a representative sample of the US adult population, this short article analyzes the low possession (adoption) of credit and debit cards among low-income consumers who are also unbanked. Using a random utility model, I estimate the potential welfare gains associated with policy options suggested in the literature to provide subsidized and unsubsidized debit cards to this consumer population.
Keywords: Consumer payment choice, household income, financial inclusion, unbanked consumers, random utility analysis
JEL Classification: D9, E42
Suggested Citation: Suggested Citation