RDP 2018-11: Consumer Credit Card Choice: Costs, Benefits and Behavioural Biases Appendix D: Heckman Sample Selection Models
October 2018
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| Motivation only | Motivation plus controls | |
|---|---|---|
| (1) | (2) | |
| Household income quartile (omitted category = lowest quartile) | ||
| 2nd | −0.02 | |
| (0.04) | ||
| 3rd | −0.01 | |
| (0.04) | ||
| 4th | −0.02 | |
| (0.05) | ||
| Age (years) (omitted category = 18–29) | ||
| 30–39 | −0.04 | |
| (0.05) | ||
| 40–49 | −0.07 | |
| (0.06) | ||
| 50–64 | −0.14** | |
| (0.06) | ||
| 65+ | −0.03 | |
| (0.06) | ||
| Employment status (omitted category = employed) | ||
| Not employed | −0.00 | |
| (0.05) | ||
| Retired | −0.01 | |
| (0.05) | ||
| Education (omitted category = did not complete year 12) | ||
| Year 12 | 0.08 | |
| (0.06) | ||
| Certificate/diploma | 0.13** | |
| (0.06) | ||
| Bachelor or higher | 0.16** | |
| (0.07) | ||
| Typical value of bank deposits (omitted category = less than $500) | ||
| $500–1,000 | 0.04 | |
| (0.06) | ||
| $1,000–7,500 | 0.08 | |
| (0.05) | ||
| $7,500–30,000 | 0.11** | |
| (0.05) | ||
| $30,000+ | 0.17*** | |
| (0.05) | ||
| Motivation for holding credit card (omitted category = other) | ||
| Rewards points | 0.37 | 0.06* |
| (0.61) | (0.03) | |
| Borrowing | 0.11 | 0.05 |
| (0.15) | (0.04) | |
| Payment | 0.14 | 0.04 |
| (0.16) | (0.03) | |
| Interest-free period and insurances | 0.24 | 0.04 |
| (0.29) | (0.03) | |
| Observations | 1,388 | 1,388 |
|
Notes: Heckman sample selection model controls are: income, age, perceptions of the cost, convenience and usefulness for managing finances of credit cards, typical value of bank deposits, internet access, employment status, and education; ***, ** and * represent statistical significance at the 1, 5 and 10 per cent level, respectively; standard errors are in parentheses Source: Author's calculations, based on data from Ipsos and RBA |
||
| Basic controls | Full controls | Full controls with income × perceived benefit interaction | |
|---|---|---|---|
| Net monetary benefit (omitted category = neutral) | |||
| Gain | −0.03 | −0.08* | −0.07 |
| (0.04) | (0.05) | (0.05) | |
| Loss | 0.10** | 0.04 | 0.04 |
| (0.04) | (0.05) | (0.05) | |
| Household income quartile (omitted category = lowest quartile) | |||
| 2nd | 0.02 | −0.05 | −0.04 |
| (0.04) | (0.05) | (0.05) | |
| 3rd | 0.17*** | 0.07 | 0.08 |
| (0.04) | (0.05) | (0.05) | |
| 4th | 0.13*** | −0.00 | 0.02 |
| (0.05) | (0.06) | (0.06) | |
| Perceived net benefit (omitted category = neutral) | |||
| Better off | −0.04 | −0.04 | |
| (0.04) | (0.04) | ||
| Worse off | 0.20*** | 0.23*** | |
| (0.06) | (0.06) | ||
| Education (omitted category = did not finish year 12) | |||
| Year 12 | 0.08 | 0.07 | |
| (0.06) | (0.06) | ||
| Certificate/diploma | 0.09* | 0.08 | |
| (0.05) | (0.05) | ||
| Bachelor or higher | 0.17*** | 0.17*** | |
| (0.05) | (0.05) | ||
| Motivation for holding credit card (omitted category = other) | |||
| Rewards points | −0.03 | −0.04 | |
| (0.06) | (0.06) | ||
| Borrowing | −0.01 | −0.01 | |
| (0.06) | (0.06) | ||
| Payment | −0.12** | −0.12** | |
| (0.05) | (0.05) | ||
| Interest-free period and insurances | −0.15*** | −0.15*** | |
| (0.05) | (0.05) | ||
| Credit card interest rate | −0.01 | −0.01 | |
| (0.01) | (0.01) | ||
| Number of bank branches in home postcode | −0.00 | −0.01 | |
| (0.00) | (0.00) | ||
| Card type (omitted category = standard) | |||
| Low-rate | −0.02 | −0.01 | |
| (0.08) | (0.09) | ||
| Rewards | 0.09** | 0.10** | |
| (0.04) | (0.04) | ||
| Observations | 813 | 813 | 813 |
|
Notes: ***, ** and * represent statistical significance at the 1, 5 and 10 per cent level, respectively; standard errors are in parentheses Source: Author's calculations, based on data from Ipsos and RBA |
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