Abstract
In this chapter we use data available from the first stage of Survey of Uruguayan Households Finance (SUHF1) and ECH 2012 to analyze access to financial services such as credit cards and bank accounts. We estimate univariate and bivariate probit models for bank account and credit cards holdings. Evidence indicates that households’ income, education level and working status are the main determinants of the probability of holding credit cards and bank accounts in Uruguay. In addition, we perform a counterfactual exercise which allows us to predict the effect of making the payment of salaries through the financial system compulsory. Our prediction is that bank account and credit card holdings would increase at around 6 and 4 percentage points, respectively.
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Notes
- 1.
Caskey Jean, “Determinants of credit card accounts: an application of Tobit Analysis”, Journal of Consumer Research. 8, 2 (1981): 172–182.
- 2.
Tan Andrew, Yen Steven and Loke Yiing, “Credit card Holders, Convenience Users and Revolvers: a Tobit Model With Binary Selection and Ordinal Treatment”, Journal of Applied Economics, Vol XIV, 2 (2011): 225–255.
- 3.
Ibid.
- 4.
Ibid.
- 5.
Hogarth Jeanne and O′Donnell Kevin, “If you build it, will they come? A Simulation of Financial Product Holdings Among Low-to-Moderate Income Households”. Journal of Consumer Policy, 23 (2000): 409–444.
- 6.
Rhine Sherrie, Greene William, Toussaint-Comeau Maude, “The Importance of Check-Cashing Business to the Unbanked: Racial/Ethnic Differences”. The Review of Economics and Statistics, 88 (2006): 146–157.
- 7.
Even though it is necessary to have a bank account to receive salaries through banks, 21 % of households who receive salaries in this way declared no to hold bank accounts. That could be rationalized by the fact that some households do not make use of the bank services apart from earning salaries, and can be interpreted as lack of financial literacy.
Further Reading
Angrist, D. J. (2001). Estimation of limited dependent variable models with dummy endogenous regressors: Simple strategies for empirical practice. Journal of Business & Economic Statistics, 19(1), 2–28.
Honohan, P. (2008). Cross-country variation in household access to financial services. Journal of Banking & Finance, 32(11), 2493–2500.
Lluberas, R. How people pay in Uruguay: the role of transaction characteristics, Banco Central del Uruguay, Serie Documentos de Trabajo DT 005/2014. http://oif.ccee.edu.uy/wp-content/uploads/2015/05/BCU_how-people-pay-in-Uruguay_the-role-of-transaction-characteristics.pdf. Accessed Jan 5, 2016
Mookerjee, R., & Kalipioni, P. (2010). Availability of financial services and income inequality: The evidence from many countries. Emerging Markets Review, 11(4), 404–408.
Bibliography
Caskey, J. (1981). Determinants of credit card accounts: An application of tobit analysis. Journal of Consumer Research., 8(2), 172–182.
Hogarth, J., & O’Donnell, K. (2000). If you build it, will they come? A simulation of financial product holdings among low-to-moderate income households. Journal of Consumer Policy, 23, 409–444.
Rhine, S., Greene, W., & Toussaint-Comeau, M. (2006). The importance of check-cashing business to the unbanked: Racial/Ethnic differences. The Review of Economics and Statistics, 88, 146–157.
Tan, A., Yen, S., & Loke, Y. (2011). Credit card holders, convenience users and revolvers: A tobit model with binary selection and ordinal treatment. Journal of Applied Economics, XIV(2), 225–255.
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Sanroman, G., Santos, G. (2016). Who Holds Credit Cards and Bank Accounts in Uruguay? Evidence from Survey of Uruguayan Households Finances. In: Batiz-Lazo, B., Efthymiou, L. (eds) The Book of Payments. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-60231-2_20
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DOI: https://doi.org/10.1057/978-1-137-60231-2_20
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