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Gender and Racial Behavior in Consumer Payment Methods under Economic Uncertainty

Author

Listed:
  • Raffi E. Garcia
  • Jyothsna G. Harithsa

Abstract

This paper analyzes the effects of high economic uncertainty on racial and gender behavior in payment methods. Using US consumer transaction-level data, we find that consumers alter their payment behavior patterns in periods of high economic uncertainty by moving away from costly and risky payment methods with high interest rates, such as credit cards. We find that females reduce their cash usage but increase their credit card usage relative to males, thus exposing themselves to higher financial vulnerability. We find no major differences in payment behavior between Blacks and Whites.

Suggested Citation

  • Raffi E. Garcia & Jyothsna G. Harithsa, 2024. "Gender and Racial Behavior in Consumer Payment Methods under Economic Uncertainty," AEA Papers and Proceedings, American Economic Association, vol. 114, pages 174-179, May.
    • Handle: RePEc:aea:apandp:v:114:y:2024:p:174-79
    DOI: 10.1257/pandp.20241103
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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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