The Co-holding Puzzle: New Evidence from Transaction-Level Data

53 Pages Posted: 16 Jun 2020 Last revised: 3 May 2022

See all articles by John Gathergood

John Gathergood

University of Nottingham - School of Economics

Arna Olafsson

Copenhagen Business School

Multiple version iconThere are 2 versions of this paper

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

Gathergood, John and Olafsson, Arna, The Co-holding Puzzle: New Evidence from Transaction-Level Data (May 3, 2022). Available at SSRN: https://ssrn.com/abstract=3607560 or http://dx.doi.org/10.2139/ssrn.3607560

John Gathergood (Contact Author)

University of Nottingham - School of Economics ( email )

Sir Clive Granger Building
University Park
Nottingham, NG7 2RD
United Kingdom

HOME PAGE: http://https://sites.google.com/site/gathergoodjohn/

Arna Olafsson

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
220
Abstract Views
829
Rank
230,015
PlumX Metrics