U.S. Consumer Holdings and Use of $1 Bills
20 Pages Posted: 18 Oct 2015
Date Written: January 1, 2015
Small denominations play a special role in a payments ecosystem because they facilitate exchange for small-value goods and services. This report examines the $1 bill holdings of adults in the United States using data from the Diary of Consumer Payments Choice (DCPC). Simply knowing the number of $1 bills in circulation is not useful for understanding consumers' actions, since many of these bills are held by merchants. The costs and benefits to the consumer of carrying $1 bills have been largely ignored in the policy discussion of the costs of switching from dollar notes to dollar coins. Knowing the facts about U.S. adult consumers' holdings of $1 bills represents a first step toward gaining an understanding of these costs and benefits to consumers.
Keywords: money demand, currency denominations, $1 bill, Diary of Consumer Payment Choice
JEL Classification: D14, E14
Suggested Citation: Suggested Citation