D1 - Household Behavior and Family Economics

• Can the characteristics of new mortgages predict borrowers’ financial stress? Insights from the 2014 oil price decline

  Staff Analytical Note 2021-22 Olga Bilyk, Ken Chow, Yang Xu

  We study the relationship between characteristics of new mortgages and borrowers’ financial stress in Canada’s energy-intensive regions following the 2014 collapse in oil prices. We find that borrowers with limited home equity were more likely to have difficulty repaying debt.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Credit and credit aggregates, Econometric and statistical methods, Financial stability, Housing JEL Code(s): C, C2, C25, D, D1, D14, G, G2, G21, G5, G51, R, R2, R21

• Payment Habits During COVID-19: Evidence from High-Frequency Transaction Data

  Staff Working Paper 2021-43 Tatjana Dahlhaus, Angelika Welte

  We examine how consumers have adjusted their payment habits during the COVID-19 pandemic. They seem to perform fewer transactions, spend more in each transaction, use less cash at the point of sale and withdraw cash from ATMs linked to their financial institution more often than from other ATMs.

  Content Type(s): Staff research, Staff working papers Topic(s): Coronavirus disease (COVID-19), Domestic demand and components, Payment clearing and settlement systems, Recent economic and financial developments JEL Code(s): C, C2, C22, C5, C55, D, D1, D12, E, E2, E21, E4, E42, E5, E52

• Household financial vulnerabilities and physical climate risks

  Staff Analytical Note 2021-19 Thibaut Duprey, Colin Jones, Callie Symmers, Geneviève Vallée

  Natural disasters occur more often than before, potentially exposing households to financial distress. We study the intersection between household financial vulnerabilities and severe weather events.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Climate change, Credit and credit aggregates, Financial stability, Housing, Recent economic and financial developments JEL Code(s): C, C2, C21, C3, C38, D, D1, D14, Q, Q5, Q54

• An Empirical Analysis of Bill Payment Choices

  Staff Working Paper 2021-23 Anneke Kosse

  How do Canadians pay their bills? 2019 survey data collected from over 4,000 Canadian consumers show how people’s bill payment choices vary with consumer characteristics and types of bills. The data also reveal that many consumers feel limited in their choices, which suggests that preferences of billers might play an important role as well.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Econometric and statistical methods, Financial services, Payment clearing and settlement systems JEL Code(s): D, D1, D9, G, G2

• Update on housing market imbalances and household indebtedness

  Staff Analytical Note 2021-4 Mikael Khan, Olga Bilyk, Matthew Ackman

  Exceptional strength in the housing market during the pandemic is underpinning Canada’s economic recovery. However, two key vulnerabilities—housing market imbalances and elevated household indebtedness—have intensified.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Coronavirus disease (COVID-19), Credit and credit aggregates, Financial stability, Housing, Recent economic and financial developments, Sectoral balance sheet JEL Code(s): D, D1, D14, D8, D84, E, E5, G, G2, G21, G28, R, R2, R21

• Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in Canada and the United States

  Staff Working Paper 2021-8 Marie-Hélène Felt, Fumiko Hayashi, Joanna Stavins, Angelika Welte

  Although credit cards are more expensive for merchants to accept than cash or debit cards, merchants typically pass through their costs evenly to all customers. Along with consumer card rewards and banking fees, this creates cross-subsidies between payment methods. Because higher-income individuals tend to use credit cards more than those with lower incomes, our results indicate that these cross-subsidies might lead to regressive distributional effects.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Financial institutions, Financial services, Market structure and pricing, Payment clearing and settlement systems JEL Code(s): D, D1, D12, D2, D23, D3, D31, E, E4, E42, G, G2, G21, L, L8, L81

• Losing Contact: The Impact of Contactless Payments on Cash Usage

  Staff Working Paper 2020-56 Marie-Hélène Felt

  Contactless payment cards are a competitive alternative to cash. Using Canadian panel data from 2010 to 2017, this study investigates whether contactless credit cards are an important contributor to the decline in the transactional use of cash. 

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C3, C33, D, D1, D12, E, E4, E41

• Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments

  Staff Working Paper 2020-36 Elizabeth Caucutt, Lance Lochner, Joseph Mullins, Youngmin Park

  Can daycare replace parents’ time spent with children? We explore this by using data on how parents spend time and money on children and how this spending is related to their child’s development.

  Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Labour markets, Potential output, Productivity JEL Code(s): D, D1, D13, H, H3, H31, J, J2, J22, J24

• What do high-frequency expenditure network data reveal about spending and inflation during COVID‑19?

  Staff Analytical Note 2020-20 Kim Huynh, Helen Lao, Patrick Sabourin, Angelika Welte

  The official consumer price index (CPI) inflation measure, based on a fixed basket set before the COVID 19 pandemic, may not fully reflect what consumers are currently experiencing. We partnered with Statistics Canada to construct a more representative index for the pandemic with weights based on real-time transaction and survey data.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Inflation and prices, Payment clearing and settlement systems JEL Code(s): D, D1, D12, E, E3, E31, E4, E42, E5, E52

• The Interplay of Financial Education, Financial Literacy, Financial Inclusion and Financial Stability: Any Lessons for the Current Big Tech Era?

  Staff Working Paper 2020-32 Nicole Jonker, Anneke Kosse

  The objective of this paper is twofold. First, we assess whether financial education might be a suitable tool to promote the financial inclusion opportunities that big techs provide. Second, we study how this potential financial inclusion could impact financial stability.

  Content Type(s): Staff research, Staff working papers Topic(s): Development economics, Digital currencies and fintech, Financial markets, Financial services, Financial stability JEL Code(s): D, D1, D14, D9, D91, D92, G, G2, G21, G23, O, O1, O16