Working Paper

Low-Income Consumers and Payment Choice


Abstract: Low-income consumers are not only constrained with spending, but also with the type and variety of payment methods available to them. Using a representative sample of the U.S. adult population, this paper analyzes the low possession (adoption) of credit and debit cards among low-income consumers who are also unbanked. Using a random utility model, I estimate the potential welfare gains associated with policy options suggested in the literature to provide subsidized and unsubsidized debit cards to this consumer population.

Keywords: consumer payment choice; household income; diversity; unbanked consumers; random utility analysis; unbanked; financial inclusion; consumer surveys; consumer behavior;

JEL Classification: D90; E42;

https://doi.org/10.29338/wp2020-03

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Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: FRB Atlanta Working Paper

Publication Date: 2020-02-01

Number: 2020-3

Pages: 16