Working papers

Payments and Cash Management in the Euro Area: Data, Theory and Quantitative Analysis (Draft)

Exploiting unique, previously unexplored transaction-level microdata from two ECB surveys on payment and cash management attitudes of consumers in the Euro Area, I provide new facts on the interaction between payment choices, cash management decisions and merchant acceptance of payment instruments. I build a simple analytical model with rationalizes a key fact: as uncertainty over the sizes of future purchases and imperfect cashless acceptance generate a precautionary motive for holding cash, it can be optimal for individuals to pay using cashless methods even when cash on hand would be enough to carry out the transaction, in order to keep cash holdings close to their optimal level. The model generalizes existing results and rationalizes features of behavior that previous theories could not account for. I then develop a quantitative model with heterogeneous households that embeds features such as imperfect cash acceptance and information on the size of incoming purchases, and I estimate its parameters at the country level using 2019 data. Preliminary results suggest that differences in supply-side constraints explain only a fraction of cross-country variation in payment and cash management behavior, with other factors such as heterogeneity in buyers' tastes for cashless payments and in the opportunity cost of holding cash playing a sizeable role.

Fleeing the Crowded Nest? Sibship Size and Leaving the Parental Home (draft coming soon)

with Adriano de Falco and Alberto Venturin

In most advanced economies, individuals born in the 1980s and 1990s grew up in considerably smaller families compared to those from previous cohorts; during their early adulthood, these individuals were much more likely to still live with their parents. Did the decline in fertility play a role in the surge of intergenerational co-residence observed in recent decades? In this paper, we investigate whether young adults with less siblings face lower privacy costs in cohabiting with their parents, compared to those that grew up in crowded nests, thereby moving out later. Exploiting data from the Survey of Health, Ageing and Retirement in Europe and the Generations and Gender Survey, we identify the causal effect of sibship size on the timing of home-leaving, exploiting random variation induced by twin births. Preliminary IV estimates show that having an additional sibling speeds up the home-leaving process, consistently with the crowded nest hypothesis.

Work in progress

Payment Choices and Cash Demand in an Equilibrium model of Card Acceptance

with Silvio Sorbera

We study theoretically the acceptance and usage of cashless payments, as well as its interaction with the transactions demand for cash, in an economy where buyers and sellers meet in order to exchange goods and services. Buyers decide how much cash to hold, and they have the option to a cashless payment device to settle purchases; sellers decide whether to accept cash payments only or to allow their customers to use cards.

Intergenerational Coresidence over the Life-Cycle