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Bruno Karoubi. Does crime impact the choice of payment instruments?

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Bruno Karoubi
Open seminar at Eesti Pank
February 8, 2018

Published in: Economy & Finance
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Bruno Karoubi. Does crime impact the choice of payment instruments?

  1. 1. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Does crime impact the choice of payment instruments? Bruno Karoubi February 5, 2018 Bruno Karoubi Does crime impact the choice of payment instruments?
  2. 2. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Econometrician, Mathematical Economics Bruno Karoubi Does crime impact the choice of payment instruments?
  3. 3. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Econometrician, Mathematical Economics Payment economics Bruno Karoubi Does crime impact the choice of payment instruments?
  4. 4. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Econometrician, Mathematical Economics Payment economics Payment choice and the economics of Crime Bruno Karoubi Does crime impact the choice of payment instruments?
  5. 5. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Payment Instruments Research Question Introduction Bruno Karoubi Does crime impact the choice of payment instruments?
  6. 6. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Payment Instruments Research Question Payment instruments: differentiated substitutes goods Cash: anonymity, cumbersome (change), cognitive costs Bruno Karoubi Does crime impact the choice of payment instruments?
  7. 7. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Payment Instruments Research Question Payment instruments: differentiated substitutes goods Cash: anonymity, cumbersome (change), cognitive costs Card: traceable, light and small Bruno Karoubi Does crime impact the choice of payment instruments?
  8. 8. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Payment Instruments Research Question Payment instruments: differentiated substitutes goods Cash: anonymity, cumbersome (change), cognitive costs Card: traceable, light and small Check: fund management tool Bruno Karoubi Does crime impact the choice of payment instruments?
  9. 9. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Payment Instruments Research Question Environment impacts every choice. Violent and Financial crime Bruno Karoubi Does crime impact the choice of payment instruments?
  10. 10. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Payment Instruments Research Question Environment impacts every choice. Violent and Financial crime Criminal environment and cash Bruno Karoubi Does crime impact the choice of payment instruments?
  11. 11. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Payment Instruments Research Question Environment impacts every choice. Violent and Financial crime Criminal environment and cash Criminal environment and card Bruno Karoubi Does crime impact the choice of payment instruments?
  12. 12. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Dataset Bruno Karoubi Does crime impact the choice of payment instruments?
  13. 13. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Representative sample of 1392 French Payers Bruno Karoubi Does crime impact the choice of payment instruments?
  14. 14. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Representative sample of 1392 French Payers Stratum Method Bruno Karoubi Does crime impact the choice of payment instruments?
  15. 15. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Representative sample of 1392 French Payers Stratum Method Phone Questionnaire Bruno Karoubi Does crime impact the choice of payment instruments?
  16. 16. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Representative sample of 1392 French Payers Stratum Method Phone Questionnaire Crime variables: Etat 4001 Bruno Karoubi Does crime impact the choice of payment instruments?
  17. 17. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Three disjoint sets of variables (2005) Payment costs: ATM population density, ATM spatial density, Payment points per capita, Withdrawal Place Bruno Karoubi Does crime impact the choice of payment instruments?
  18. 18. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Three disjoint sets of variables (2005) Payment costs: ATM population density, ATM spatial density, Payment points per capita, Withdrawal Place Consumer controls: Gender, Age, Married, Degree, Income, Subjective Risk, Number of Purchases, Average value of total purchases, Type of profession Bruno Karoubi Does crime impact the choice of payment instruments?
  19. 19. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Three disjoint sets of variables (2005) Payment costs: ATM population density, ATM spatial density, Payment points per capita, Withdrawal Place Consumer controls: Gender, Age, Married, Degree, Income, Subjective Risk, Number of Purchases, Average value of total purchases, Type of profession Bank/Payers relations: Number of bank account, Surcharge, Number of account holding banks, Account Checkout Frequency Bruno Karoubi Does crime impact the choice of payment instruments?
  20. 20. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Two main families of crime indicators. Indicators of Violence: Violent Theft, Street Crime Bruno Karoubi Does crime impact the choice of payment instruments?
  21. 21. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Two main families of crime indicators. Indicators of Violence: Violent Theft, Street Crime Indicator of Financial Crime: Swindling and Breach of Trust Bruno Karoubi Does crime impact the choice of payment instruments?
  22. 22. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Two main families of crime indicators. Indicators of Violence: Violent Theft, Street Crime Indicator of Financial Crime: Swindling and Breach of Trust Size effect Bruno Karoubi Does crime impact the choice of payment instruments?
  23. 23. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Two main families of crime indicators. Indicators of Violence: Violent Theft, Street Crime Indicator of Financial Crime: Swindling and Breach of Trust Size effect 2004 and 2005 Bruno Karoubi Does crime impact the choice of payment instruments?
  24. 24. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Card Ownership Bruno Karoubi Does crime impact the choice of payment instruments?
  25. 25. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks General remarks Individual variables Crime variables Dependent Variables Card Ownership Weekly amount withdrawn at ATM Bruno Karoubi Does crime impact the choice of payment instruments?
  26. 26. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Card Cash Econometric Strategy Bruno Karoubi Does crime impact the choice of payment instruments?
  27. 27. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Card Cash Probit model Bruno Karoubi Does crime impact the choice of payment instruments?
  28. 28. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Card Cash Probit model Cluster estimation of residuals Bruno Karoubi Does crime impact the choice of payment instruments?
  29. 29. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Card Cash 1 Consumer out of 5 does not withdraw cash Bruno Karoubi Does crime impact the choice of payment instruments?
  30. 30. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Card Cash 1 Consumer out of 5 does not withdraw cash Common characteristics of non-withdrawers: Selection bias Bruno Karoubi Does crime impact the choice of payment instruments?
  31. 31. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Card Cash 1 Consumer out of 5 does not withdraw cash Common characteristics of non-withdrawers: Selection bias Heckman selection model Bruno Karoubi Does crime impact the choice of payment instruments?
  32. 32. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Results Bruno Karoubi Does crime impact the choice of payment instruments?
  33. 33. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Amount: Cash Card ownership Street crime, 2004 1.03a (0.47) Violent theft, 2004 9.57a (3.73) -0.1b (0.05) Financial frauds, 2004 -5.03b (3.04) -6.96b (3.82) 0.10a (0.04) Violent theft, 2005 -0.11a (0.05) Financial and eco- nomic frauds, 2005 0.11a (0.05) Bruno Karoubi Does crime impact the choice of payment instruments?
  34. 34. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card More violent crime causes an increase in the weekly amount of cash withdrawn Bruno Karoubi Does crime impact the choice of payment instruments?
  35. 35. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card More violent crime causes an increase in the weekly amount of cash withdrawn less withdrawals and ATM delivers only notes Bruno Karoubi Does crime impact the choice of payment instruments?
  36. 36. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card More violent crime causes an increase in the weekly amount of cash withdrawn less withdrawals and ATM delivers only notes More financial means less cash withdrawn Bruno Karoubi Does crime impact the choice of payment instruments?
  37. 37. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card More violent crime causes an increase in the weekly amount of cash withdrawn less withdrawals and ATM delivers only notes More financial means less cash withdrawn Account Manipulation Bruno Karoubi Does crime impact the choice of payment instruments?
  38. 38. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Present day and past year crime indicator Bruno Karoubi Does crime impact the choice of payment instruments?
  39. 39. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Present day and past year crime indicator More violent crime means a lower probability of card ownership Bruno Karoubi Does crime impact the choice of payment instruments?
  40. 40. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Present day and past year crime indicator More violent crime means a lower probability of card ownership More cash: less incentive to own a card Bruno Karoubi Does crime impact the choice of payment instruments?
  41. 41. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Present day and past year crime indicator More violent crime means a lower probability of card ownership More cash: less incentive to own a card Present day and past year crime indicator Bruno Karoubi Does crime impact the choice of payment instruments?
  42. 42. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Present day and past year crime indicator More violent crime means a lower probability of card ownership More cash: less incentive to own a card Present day and past year crime indicator More financial crime means a higher probability of card ownership Bruno Karoubi Does crime impact the choice of payment instruments?
  43. 43. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Table Cash Card Present day and past year crime indicator More violent crime means a lower probability of card ownership More cash: less incentive to own a card Present day and past year crime indicator More financial crime means a higher probability of card ownership Fraudsters are more prone to insure their legitimate payments Bruno Karoubi Does crime impact the choice of payment instruments?
  44. 44. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Concluding Remarks Bruno Karoubi Does crime impact the choice of payment instruments?
  45. 45. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Two-sided market: Merchant accept or refuse alternative payment instruments Bruno Karoubi Does crime impact the choice of payment instruments?
  46. 46. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Two-sided market: Merchant accept or refuse alternative payment instruments Karoubi(2012): Cash perception Bruno Karoubi Does crime impact the choice of payment instruments?
  47. 47. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Two-sided market: Merchant accept or refuse alternative payment instruments Karoubi(2012): Cash perception Karoubi(2015): Card acceptance Bruno Karoubi Does crime impact the choice of payment instruments?
  48. 48. A few words about myself Introduction Dataset Econometric Strategy Results Concluding Remarks Thank you for your attention Bruno Karoubi Does crime impact the choice of payment instruments?

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