Mobile Payments and Household Consumption in Pakistan: A Time Series Analysis of Transaction Frequency and Value (2006–2018)

Date of Award

Spring 5-3-2025

Document Type

Thesis

Degree Name

Bachelor of Science (BS)

Department

Economics

First Advisor

Marketa Wolfe

Second Advisor

Monica Das

Abstract

This thesis investigates the relationship between mobile payment transactions and household consumption in Pakistan over the period 2006 to 2018. Using quarterly time series data and a log-log Ordinary Least Squares (OLS) regression framework, the study analyzes how the frequency and value of mobile transactions influence aggregate household spending, while controlling for inflation and GDP growth. The results show that transaction frequency has a statistically significant and positive association with household consumption, suggesting that greater behavioral engagement with mobile financial services facilitates higher economic activity. In contrast, the total value of transactions does not exhibit a significant effect, indicating that usage intensity may be a more meaningful driver of consumption than financial volume. These findings support the theoretical lens of Transaction Cost Theory and highlight the importance of reducing frictions in daily financial behavior. The study contributes to the literature by focusing on a South Asian context, incorporating macroeconomic controls, and distinguishing between frequency and value effects. Policy implications include the need to prioritize adoption and routine usage of digital financial platforms as a pathway to economic inclusion and consumption growth.

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