Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/241222
Authors: 
Felt, Marie-Hélène
Year of Publication: 
2020
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2020-56
Publisher: 
Bank of Canada, Ottawa
Abstract: 
I investigate the impact of contactless credit cards (CTCs) on cash use in Canada, using panel data between 2010 and 2017. I show that ignoring unobserved heterogeneity would lead to overstating the impact of CTCs on cash usage in a linear model. Using finite mixture modelling, I provide evidence of the differential impacts of CTCs on the extensive versus intensive margins of cash usage. I use a two-part model, with an exclusion restriction for better identification, to model both margins separately. I obtain that CTC use negatively influences the intensive margin of cash usage but not its extensive margin. There is no clear evidence of an S-curve pattern in the impact of CTCs on cash usage over the sample period.
Subjects: 
Bank notes
Digital currencies and fintech
Econometric and statistical methods
Financial services
JEL: 
C33
D12
E41
Document Type: 
Working Paper

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