The Boston Fed Study of Consumer Behavior and Payment Choice: A Survey of Federal Reserve System Employees

84 Pages Posted: 25 Apr 2007

See all articles by Marques Benton

Marques Benton

Federal Reserve Bank of Boston

Krista Blair

Federal Reserve Bank of Boston

Marianne D. Crowe

Federal Reserve Bank of Boston

Scott D. Schuh

Federal Reserve Bank of Boston - Research Department

Date Written: February 14, 2007

Abstract

The way people pay for goods and services is changing dramatically, but little data and research on consumer behavior and payment choice are publicly available. This paper describes the results of a survey of payment behavior and attitudes taken by Federal Reserve employees in 2004. Major contributions of the survey are that it asks: 1) why payment choices are made; 2) why individual payment behavior has changed; and 3) why individual-specific payment characteristics matter for payment choice. Although the survey is not statistically representative of U.S. consumers, and thus may not provide accurate estimates of aggregate U.S. payment trends, many results are consistent with data from more representative payment surveys. For example, the data show a trend away from check-writing and toward electronic and emerging payment methods, but the choice of payment method depends on the type of payment, amount of payment, and other complex factors. Also, cost, convenience, and control over timing are the most important characteristics determining respondents' adoption and use of payment methods. We find that payment characteristics vary widely across respondents, partly because of inherent heterogeneity but perhaps also because of measurement error, misperception, or inadequate information (lack of consumer education). Cross-sectional evidence shows that respondents tend to use payment methods in a manner broadly consistent with their reported assessments of the payment characteristics.

JEL Classification: D12, D14, E41, C81

Suggested Citation

Benton, Marques and Blair, Krista and Crowe, Marianne D. and Schuh, Scott, The Boston Fed Study of Consumer Behavior and Payment Choice: A Survey of Federal Reserve System Employees (February 14, 2007). FRB of Boston Public Policy Discussion Paper No. 07-1. Available at SSRN: https://ssrn.com/abstract=982404 or http://dx.doi.org/10.2139/ssrn.982404

Marques Benton (Contact Author)

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Krista Blair

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Marianne D. Crowe

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Scott Schuh

Federal Reserve Bank of Boston - Research Department ( email )

600 Atlantic Ave.
Boston, MA 02210
United States
617-973-3941 (Phone)
617-619-7541 (Fax)

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