We study how consumer spending responds to digital payments, using the differential switch to digital payments across consumers induced by the sudden 2016 Indian Demonetization for identification. Digital payment use rose by 2.94 percentage points and monthly spending increased by 2.38% for an additional 10 percentage points in prior cash dependence. Spending remained elevated even when cash availability recovered. Robustness analyses show that the spending response is not driven by purchase substitution, income shocks, credit supply, or price changes. We provide causal evidence that digital payments increase consumer spending due to subdued endowment effects.

中文翻译：

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数字支付和消费：来自 2016 年印度废钞令的证据

我们研究消费者支出如何响应数字支付，利用 2016 年印度突然的废钞令引起的消费者向数字支付的差异化转变进行识别。数字支付使用量增加了 2.94 个百分点，月支出增加了 2.38%，之前的现金依赖度又增加了 10 个百分点。即使现金供应恢复，支出仍然很高。稳健性分析表明，支出反应不是由购买替代、收入冲击、信贷供应或价格变化驱动的。我们提供的因果证据表明，由于禀赋效应减弱，数字支付增加了消费者支出。