The Co-holding Puzzle: New Evidence from Transaction-Level Data
53 Pages Posted: 16 Jun 2020 Last revised: 3 May 2022
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The Co-holding Puzzle: New Evidence from Transaction-Level Data
The Co-Holding Puzzle: New Evidence from Transaction-Level Data
Date Written: May 3, 2022
Abstract
Using detailed and highly disaggregated data on household finances, we examine the
tendency of consumers to “co-hold” savings and debt simultaneously. The disaggregated
nature of the data allows us to calculate co-holding at daily frequency. We find that coholding
is rare and mostly occurs in short spells within the month, but is a persistent
behavior among a subset of consumers. For this group, we find evidence in support of
explanations for co-holding based upon functional mental accounting in which agents
hold spending and saving accounts, while we find less support for rational explanations.
Keywords: co-holding, credit card puzzle, household finance
JEL Classification: D12; D14; D15; G51
Suggested Citation: Suggested Citation