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

55 Pages Posted: 16 Jun 2020 Last revised: 10 Oct 2023

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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
co-holding mostly occurs in short spells within the month and the level of co-holding
is typically modest, while a subset of individuals are persistent co-holders. Periods of
co-holding are not associated with shocks at the individual level. Drawing on detailed
transaction-level data, we show that co-holding is related to the allocation of different
categories of expenditure to accounts in credit and debit.

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

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