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| Bruno Karoubi |
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| ''Does crime influence the merchants' preference for cash? Evidence from France.'' |
| ( 2012, Vol. 32 No.4 ) |
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| This paper is an attempt to determine whether crime as an environmental factor has a significant impact on merchant preference for cash. I exploit a unique database from a representative sample of merchants and show that crime has a twofold impact on the merchant subjective preference for cash. I build an indicator composed of theft variables concerning primarily both consumers and merchants. I find that a merchant whose store is located in a department in which my indicator is high has Ceteris Paribus a lower than average preference for cash. I also find that a higher level of financial fraud increases it. The first effect is interpreted to be the result of a precaution motive (cash payment and storage involve risk of loss and theft), while the second results from adverse selection (cash payments make tax evasion easier). |
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| Keywords: Payment Instruments, Crime |
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| Manuscript Received : Sep 05 2012 | | Manuscript Accepted : Dec 20 2012 |
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