Abstract

CEBALLOS-MINA, Owen Eli  and  SANTIAGO-AYALA, Luis Enrique. The effects of credit cards on consumption structure and inequality in Mexican households. Finanz. polit. econ. [online]. 2019, vol.11, n.2, pp.299-320.  Epub Apr 27, 2020. ISSN 2248-6046.  https://doi.org/10.14718/revfinanzpolitecon.2019.11.2.5.

This paper analyzes the effects of credit card holding on the structure and distribution of household expenditure in Mexico in 2016. To the effect, two-stage quantile regressions are used to estimate models for consumption determinants, using instrumental variables on credit card holding. The study evidences that credit cards have a positive effect on aggregate consumption, driven mainly by increased health expenditure and items such as clothing, communications, and entertainment. Results show that credit card holding does not have statistical effects on education expenditure, nor on durable goods consumption. Also, the effects of credit cards are greater on the top of consumption distribution; thus, the effects of such financial services on the reduction of inequality and the future well-being of families are questioned, given that preconditions for financial inclusion have not been enough.

Keywords : Consumption; credit cards; financial inclusion; inequality; Mexican household; well-being.

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