The impact of technological change on household transactions account balances: An empirical cross-section study

The impact of adoption of new technology by households on their behavior in holding transactions balances is determined. Previous studies show that households respond to the availability of automatic teller machines by reducing their currency inventories. Reduced currency needs may be reflectted in a reallocation of funds from currency to transaction balances. To test this hypothesis, data from 2 large household surveys are utilized. It is shown that the use of technology has a substantial impact on the transactions balances held by households.