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Time to Eliminate the Penny from the U.S. Coinage System: New Evidence

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  • Robert Whaples

    (Wake Forest University)

Abstract

I argue that the U.S. Mint should stop producing pennies. The Mint is losing money on penny production and new evidence from a multi-state convenience store chain shows that eliminating the penny will not impose a “rounding tax” on consumers. Eliminating the penny will have a negligible impact on inflation and on convenience store costs and profits, but it will save time for customers and clerks, which may be worth about $730 million per year.

Suggested Citation

  • Robert Whaples, 2007. "Time to Eliminate the Penny from the U.S. Coinage System: New Evidence," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 139-146, Winter.
    • Handle: RePEc:eej:eeconj:v:33:y:2007:i:1:p:139-146
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume33/V33N1P139_146.pdf
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    References listed on IDEAS

    as
    1. Robert A. Margo, 2000. "Wages and Labor Markets in the United States, 1820-1860," NBER Books, National Bureau of Economic Research, Inc, number marg00-1.
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    Cited by:

    1. Marko Rašeta, 2017. "Eliminating the Fractional Part of Currency from Circulation (Pennies, Cents, Paras, Kopeikas). An Analytic Study," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(3), pages 520-529, June.
    2. Andrew Keinsley, 2013. "Do You Mind if I Round?: Eliminating the Penny A Structural Analysis," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201309, University of Kansas, Department of Economics.
    3. Prescott, Brian C. & Shy, Oz, 2023. "Cash payments and the penny policy debate," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 80-94.
    4. Erika Leszkó, 2009. "Rounding is not to be feared," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 4(2), pages 14-21, July.

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