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Consumer heterogeneity and the use of cashless payments in Japan in 2007–2020: a latent class approach

Author

Listed:
  • Besstremyannaya, Galina

    (HSE University, Moscow, Russian Federation)

  • Dasher, Richard

    (Stanford University, Stanford, USA)

  • Ganaga, Egor

    (HSE University, Moscow, Russian Federation)

Abstract

The paper exploits ordered choice logit models with latent classes to account for unobservable consumer heterogeneity in analyzing the preferences for cashless payments in Japan for purchases of different sizes. Using the data of the Survey of Household Finance (2007–2020), we discover that consumers separate into classes of more and less frequent users of cashless payments for each category of purchases. The probability of belonging to the former class is positively related to the fact of consumer taking measures for the protection of their financial assets. The results reveal a statistically different effect of consumer socio-demographic characteristics (sex, age, income, employment, education, household size), the binary variable for residence in a large city and Kanto region, and the dummies for 2019 and 2020 on the choice of cashless payments in the two latent classes.

Suggested Citation

  • Besstremyannaya, Galina & Dasher, Richard & Ganaga, Egor, 2024. "Consumer heterogeneity and the use of cashless payments in Japan in 2007–2020: a latent class approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 75, pages 33-53.
    • Handle: RePEc:ris:apltrx:0502
    as

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    More about this item

    Keywords

    cashless payments; unobservable heterogeneity; latent classes; finite mixture; ordered choice models;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • G50 - Financial Economics - - Household Finance - - - General

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