Nicole Hentschel
Last Name
Hentschel
First name
Nicole
Email
nicole.hentschel@unisg.ch
Phone
+41 71 224 70 34
3 results
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Item type:Publication, Risk Attitudes do not explain Cash Holdings(2024-12-03)Despite the long-term trend away from cash and the widespread adoption and acceptance of payment cards, many people still carry considerable amounts of cash. In a pre-registered study, I examine whether risk attitudes or a preference for the timing of resolution of uncertainty can explain consumers' persistent cash holdings. To self-insure against the possibility of being unable to pay by card, risk-averse consumers are expected to hold cash in larger amounts. Moreover, consumers who overweight the small probability of card non-acceptance and those who prefer early resolution of uncertainty are also predicted to carry more cash. I test these predictions using data from the RAND American Life Panel (N=1,021) and on experimental preference data from Swiss consumers (N=1,682). 86% of U.S. and 95% of Swiss individuals carry cash in their wallets, with an average of USD 63 and CHF 94, respectively. Neither risk aversion, probability weighting, nor a preference for early resolution of uncertainty are consistently related to cash holdings. This highlights a gap in our understanding of cash management that current standard and behavioral theories do not fully address, warranting further research.Type:working paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Financial Innovation, Payment Choice and Cash Demand –
Causal Evidence from the Staggered Introduction of Contactless Debit CardsWe examine how an innovation in payment technology impacts on consumer payment choice and cash demand. We study the staggered introduction of contactless debit cards between 2016-2018 by a mid-sized retail bank. The timing of access to the contactless payment technology is quasi-random across clients, depending only on the expiry date of the pre-existing debit card. Our analysis is based on account-level data for a random sample of 30’000 bank clients and follows a pre-analysis plan. Average treatment effect estimates reveal that access to the contactless payment technology sizably increases the use of debit cards for small-value payments. However, relative to total consumer spending this increase in debit card payments is negligible. As a consequence, the average treatment effect on the cash share of payments and cash demand is economically small and statistically insignificant. Our analysis documents important heterogenous treatment effects on payment choice: Pre-treatment cash-only consumers react the least to the payment innovation. Explorative analyses reveal that young, urban consumers display the strongest change in payment choice. They also document no treatment effect on total consumer spending.Type:working paperVolume:2020/02Issue:02 - Some of the metrics are blocked by yourconsent settings
Item type:Research Project, Hiding in plain sight: preferred habitat effects in short-term rates *(2024-11-06); ;