RDP 2018-11: Consumer Credit Card Choice: Costs, Benefits and Behavioural Biases Appendix E: Switching Behaviour Regression Output

Mary-Alice Doyle

October 2018

Table E1: Regression Results – Probability of Considering Switching
Probit average marginal effects on censored observations, 2016
  Basic controls Full controls(a) Full controls with income ×
perceived benefit interaction(a)
Net monetary benefit (omitted category = neutral)
Gain −0.04 −0.07 −0.06
  (0.04) (0.04) (0.04)
Loss 0.12*** 0.05 0.05
  (0.04) (0.05) (0.05)
Household income quartile (omitted category = lowest quartile)
2nd 0.02 −0.05 −0.03
  (0.04) (0.05) (0.05)
3rd 0.18*** 0.08 0.08
  (0.04) (0.05) (0.05)
4th 0.12** 0.01 (b)
  (0.05) (0.06)  
Perceived net monetary benefit (omitted category = neutral)
Better off   −0.04 −0.04
    (0.04) (0.04)
Worse off   0.18*** 0.21***
    (0.06) (0.06)
Education (omitted category = did not finish year 12)
Year 12   0.08 0.07
    (0.05) (0.05)
Certificate/diploma   0.09** 0.09*
    (0.05) (0.05)
Bachelor or higher   0.18*** 0.17***
    (0.05) (0.05)
Motivation for holding credit card (omitted category = other)
Rewards points   −0.02 −0.03
    (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   −0.14*** −0.14***
    (0.05) (0.05)
Observations 841 816 814

Notes: ***, ** and * represent statistical significance at the 1, 5 and 10 per cent level, respectively; standard errors are in parentheses
(a) Also include controls for age, employment status, typical value of bank deposits, number of credit cards, number of bank branches in home postcode, credit card interest rate, and card type (standard, low-rate or rewards);
(b) Not enough respondents in this cell to generate results

Source: Author's calculations, based on data from Ipsos and RBA
Table E2: Regression Results – Probability of Switching
Probit average marginal effects, 2016
  Basic controls Full controls(a)
Net monetary benefit (omitted category = neutral)
Gain −0.03 −0.06**
  (0.02) (0.03)
Loss 0.02 −0.03
  (0.03) (0.03)
Household income quartile (omitted category = lowest quartile)
2nd 0.03* 0.02
  (0.01) (0.02)
3rd 0.08*** 0.05**
  (0.02) (0.02)
4th 0.10*** 0.06**
  (0.03) (0.03)
Perceived net benefit (omitted category = neutral)
Better off   0.02
    (0.04)
Worse off   −0.02
    (0.02)
Education (omitted category = did not finish year 12)
Year 12   −0.00
    (0.03)
Certificate/diploma   0.02
    (0.02)
Bachelor or higher   0.08***
    (0.03)
Motivation for holding credit card (omitted category = other)
Rewards points   −0.04
    (0.04)
Borrowing   0.00
    (0.04)
Payment   −0.10***
    (0.03)
Interest-free period and insurances   −0.09***
    (0.03)
Card type (omitted category = standard)
Low-rate   0.00
    (0.01)
Rewards   0.02
    (0.04)
Observations 816 816

Notes: ***, ** and * represent statistical significance at the 1, 5 and 10 per cent level, respectively; standard errors are in parentheses
(a) Also includes controls for age, employment status, typical value of bank deposits, number of credit cards, number of bank branches in home postcode, and credit card interest rate

Source: Author's calculations, based on data from Ipsos and RBA