Comments on Debit Card Float and Consumption Patterns by David Bounie & Abel Francois & and Elizabeth Kiser Conference on Payment Systems

Do payment systems have “real” effects? Obvious goal: test the LCH But should we then focus more on the distinction between “card” “no card” people Technically the “no card” people vanish from the picture because the coefficient of the Mills ratio is not “significant”

I have two objections The results depends on the (weak) instruments Casual (Finnish) evidence suggests the opposite I am also quite convinced that the card type choice is “endogenous”, therefore the simple estimation procedure may not be warranted

Additional problems & puzzles The coefficients of the “expenditure function” are somewhat obscure (income, family size) Weekly consumption patterns are somewhat different but the payday (week) values are exactly the same. Suspicious question: are there some seasonality left in monthly expenditures?

Open questions What does a payday mean in a setting where we have multiple jobs? Individual data vs household expenditures Could we somehow control assets and liabilities (say, highly indebted people would like have deferred payments)