Research Discussion Paper – RDP 2018-11 Consumer Credit Card Choice: Costs, Benefits and Behavioural Biases
October 2018
Contents
- Introduction
- Literature
- Data
- Estimating the Net Monetary Benefits of Credit Card Holding
- Distribution of Monetary Costs and Benefits
- Evidence of Behavioural Biases?
- Barriers to Switching
- Conclusion
- Appendix A: Monetary and Non-monetary Benefits
- Appendix B: Estimation and Sensitivity Testing of Net Monetary Benefit
- Appendix C: Regression Analysis of Overall Distribution of Net Benefit
- Appendix D: Heckman Sample Selection Models
- Appendix E: Switching Behaviour Regression Output
- Appendix F: End of Survey Questionnaire
- References
I would like to thank Michele Bullock, David Emery, Chay Fisher, Gianni La Cava, Ed Tellez, Tony Richards, John Simon and Robert Slonim for their thoughtful feedback. Thank you also to seminar participants at the Reserve Bank of Australia and to others who provided helpful assistance and advice; in particular James Bishop, Dilhan Perera and Anirudh Yadav. This research builds on earlier analysis by Rebecca Fairbrother, Paul Ryan and Hao Wang. In addition, thanks to my colleagues Kimberly Francis, Sean Langcake, Jiamin Lim, Christian Maruthiah and Stephen Mitchell for help collecting some of the data used in this analysis. The views in this paper are my own and do not reflect the views of the Reserve Bank of Australia. Any errors are my own.