I am a PhD candidate in Finance at the University of St.Gallen, Switzerland and a Senior Cash Market Analyst at the Swiss National Bank.
My research focuses on household finance and behavioral economics, particularly payment behavior. I'm working under the supervision of Martin Brown and Christian Biener.
You can reach me at: nicole.hentschel@unisg.ch, nicole.hentschel@snb.ch
Job market paper
Abstract: Despite the long-term trend away from cash and the widespread adoption and acceptance of payment cards, many people still carry considerable amounts of cash. In a pre-registered study, I examine whether risk attitudes or a preference for the timing of resolution of uncertainty can explain consumers' persistent cash holdings. To self-insure against the possibility of being unable to pay by card, risk-averse consumers are expected to hold cash in larger amounts. Moreover, consumers who overweight the small probability of card non-acceptance and those who prefer early resolution of uncertainty are also predicted to carry more cash. I test these predictions using data from the RAND American Life Panel (N=1,021) and on experimental preference data from Swiss consumers (N=1,682). 86% of U.S. and 95% of Swiss individuals carry cash in their wallets, with an average of USD 63 and CHF 94, respectively. Neither risk aversion, probability weighting, nor a preference for early resolution of uncertainty are consistently related to cash holdings. This highlights a gap in our understanding of cash management that current standard and behavioral theories do not fully address, warranting further research.
This figure displays the association between the amount of cash holdings and risk aversion (panel A and panel C), probability weighting (panel B), as well as a preference for the early resolution of uncertainty (panel D). All nonbinary variables are standardized. The sample size of the U.S. RAND American Life Panel (ALP) is N=1,021. The sample size of the Swiss insurance sample is N=1,682.
with Martin Brown, Hannes Mettler and Helmut Stix
Journal of Monetary Economics (2022)
Abstract: How does the improved convenience of electronic payments affect consumer payment choice and cash demand? We study the staggered, quasi-random introduction of contactless debit cards by a retail bank. We use account-level data and compare transactions which are eligible for contactless authentication to transactions which are not. We identify a significant convenience effect on debit card use at the intensive margin. The convenience elasticity is strongest among younger clients. Treatment effects increase over time, coinciding with increasing merchant acceptance. The effect on cash demand is economically small and statistically insignificant. We also find no effect on consumer spending.
Media coverage: World Bank Blogs, LSE Business Review, SUERF Policy Briefs
Visual_Abstract_contactless.pdfwith Martin Brown, Giannina Elsaid, Thomas Nellen
Work in progress: We study the role of social interactions in shaping the payment behavior of young adults. Using payment survey and diary data from the Swiss National Bank collected between 2017 and 2022, we document that the decline in cash use among individuals aged 15 to 24 is substantially larger than among older age groups. We examine whether this shift can be explained by the social influence of parents or peers. Our empirical strategy relies on variation in exposure to these groups, measured by co-residence with parents and the share of peer-to-peer and leisure transactions in total spending. We find that young people are more likely to use cash if they receive financial transfers from parents in cash, and more likely to use payment apps if they engage in peer-to-peer payments with their friends. We find no evidence that the broader payment behavior of parents or peers affects payment choice directly or through shaping preferences or beliefs about payment instrument attributes. This suggests that social interactions shape youth payment behavior primarily through direct financial contact rather than through learning or imitation.
Changes in volume shares of cash and payment apps by age group, 2017–2022
with Jasmin Barman-Aksözen, Mårten Pettersson, Eva Schupp, Francesca Granata, Cornelia Dechant, Mehmet Hakan Aksözen and Rocco Falchetto
International Journal of Environmental Research and Public Health (2024)
Abstract: The National Institute for Health and Care Excellence (NICE) in England uses quality-adjusted life years (QALYs) to assess the cost-effectiveness of treatments. A QALY is a measure that combines the size of the clinical benefit of a treatment with the time the patient benefits from it, i.e., the time horizon. We wanted to know how consistently QALY gains are calculated at NICE. Therefore, we have analysed information on the time horizons used for the QALY calculations of the concluded evaluations conducted under the Highly Specialised Technologies programme for treatments of very rare diseases at NICE. For treatments with final guidance published by December 2023 (n = 29), a time horizon of median 97.5 years (range: 35 to 125 years) was used to calculate the QALY gains. For most QALY calculations, the accepted time horizon was longer than either the expected treatment duration or the estimated life expectancy. In contrast, for the only technology with a final negative funding decision, i.e., afamelanotide for treating the lifelong chronic disease erythropoietic protoporphyria, a time horizon that was shorter than the expected treatment duration was used. The fairness and consistency of the evaluation process of treatments for very rare diseases at NICE should be reviewed.
Poster_Pamplona2024_IPPN_QALYs_final_13Sep2024.pdf
