Arbeitspapier
How long does it take you to pay? A duration study of canadian retail transaction payment times
Using an exclusive data set of payment times for retail transactions made in Canada, I show that cash is the most time-efficient method of payment (MOP) when compared with payments by debit and credit cards. I model payment efficiency using Cox proportional hazard models, accounting for consumer choice of MOP. I propose two instruments to identify and estimate the causal relationship between MOP and payment time: (1) the value of the transaction, and (2) the duration of the payment preceding the one under observation. Discounting consumer selection underestimates the efficiency of cash relative to cards. Overall, the efficiency of MOPs is an important component of the private and social costs of making and accepting payments. The efficiency of cash helps explain its continued use in Canada, which is motivated by its low cost in terms of payment time for consumers and merchants.
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Canada Staff Working Paper ; No. 2018-46
- Classification
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Wirtschaft
Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
Multiple or Simultaneous Equation Models: Instrumental Variables (IV) Estimation
Duration Analysis; Optimal Timing Strategies
Organizational Behavior; Transaction Costs; Property Rights
Demand for Money
Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
- Subject
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Bank notes
Econometric and statistical methods
Payment clearing and settlement systems
- Event
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Geistige Schöpfung
- (who)
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Vallée, Geneviève
- Event
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Veröffentlichung
- (who)
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Bank of Canada
- (where)
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Ottawa
- (when)
-
2018
- DOI
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doi:10.34989/swp-2018-46
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Vallée, Geneviève
- Bank of Canada
Time of origin
- 2018
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