U.S. consumer holdings and use of $1 Bills

Fulford, Scott L.; Greene, Claire; Murdock, William

Report

U.S. consumer holdings and use of $1 Bills

Abstract: Small denominations play a special role in a payments ecosystem because they facilitate exchange for small-value goods and services. This report examines the $1 bill holdings of adults in the United States using data from the Diary of Consumer Payments Choice (DCPC). Simply knowing the number of $1 bills in circulation is not useful for understanding consumers' actions, since many of these bills are held by merchants. The costs and benefits to the consumer of carrying $1 bills have been largely ignored in the policy discussion of the costs of switching from dollar notes to dollar coins. Knowing the facts about U.S. adult consumers' holdings of $1 bills represents a first step toward gaining an understanding of these costs and benefits to consumers.

Keywords: $1 bill; Diary of Consumer Payment Choice; currency denominations; money demand;

JEL Classification: D14; E41;