The Review of Economics and Statistics Vol. 107 No. 5 2025
The Need for Speed: Demand, Regulation, and Welfare on the Margin of Alternative Financial Services
Abstract
We use a nonlinear reduction in a bank’s check-cashing fees and variation in regulated check-clearing times to identify the elasticity of demand for cashing checks rather than depositing them. We find that an extra day of check-clearing time makes account holders 65.5% more likely to cash a check than deposit it, which implies they are willing to pay $11.17 per day for faster access to their funds—an effective annualized discount rate of 11,054% for the average check. We use this elasticity to evaluate recent proposals that mandate faster check-clearing times.
- DOI
- 10.1162/rest_a_01308
- Volume
- 107
- Issue
- 5
- Pages
- 1439-1447
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref