Heng Chen

Principal Researcher

Bio

Heng Chen is a Principal Researcher in the Currency Department at the Bank of Canada. His primary research interests center on the structural identification and estimation of the causal effects of the method of payments on the cash usage. Specific topics include distributional estimations using the longitudinal CFM data. Heng Chen received his PhD in economics from Vanderbilt University.


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Staff Discussion Papers

The Costs of Point-of-Sale Payments in Canada

Using data from our 2014 cost-of-payments survey, we calculate resource costs for cash, debit cards and credit cards. For each payment method, we examine the total cost incurred by consumers, retailers, financial institutions and infrastructures, the Royal Canadian Mint and the Bank of Canada.

Staff Working Papers

A Spatial Model of Bank Branches in Canada

Staff Working Paper 2020-4 Heng Chen, Matthew Strathearn
This study explores the market structure of the Canadian banking industry at the postal-code level. In particular, we study the effect of geographic and industrial concentration on the density of bank branches.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Firm dynamics, Market structure and pricing JEL Code(s): L, L1, R, R3

Cash Versus Card: Payment Discontinuities and the Burden of Holding Coins

Staff Working Paper 2017-47 Heng Chen, Kim Huynh, Oz Shy
Cash is the preferred method of payment for small value transactions generally less than $25. We provide insight to this finding with a new theoretical model that characterizes and compares consumers’ costs of paying with cash to paying with cards for each transaction.

The Mode is the Message: Using Predata as Exclusion Restrictions to Evaluate Survey Design

Staff Working Paper 2017-43 Heng Chen, Geoffrey R. Dunbar, Rallye Shen
Changes in survey mode (e.g., online, offline) may influence the values of survey responses, and may be particularly problematic when comparing repeated cross-sectional surveys.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods JEL Code(s): C, C8

Retail Payment Innovations and Cash Usage: Accounting for Attrition Using Refreshment Samples

Staff Working Paper 2014-27 Heng Chen, Marie-Hélène Felt, Kim Huynh
We exploit the panel dimension of the Canadian Financial Monitor (CFM) data to estimate the impact of retail payment innovations on cash usage. We estimate a semiparametric panel data model that accounts for unobserved heterogeneity and allows for general forms of non-random attrition.

Sheep in Wolf’s Clothing: Using the Least Squares Criterion for Quantile Estimation

Staff Working Paper 2014-24 Heng Chen
Estimation of the quantile model, especially with a large data set, can be computationally burdensome. This paper proposes using the Gaussian approximation, also known as quantile coupling, to estimate a quantile model.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods JEL Code(s): C, C1, C13, C14, C2, C21

Journal Publications

Refereed journals

  • “Quantile Treatment Effects in the Regression Kink Design”
    (with Harold D. Chiang and Yuya Sasaki), Econometric Theory, forthcoming.
  • “A Spatial Panel Model of Bank Branches in Canada”
    (with Matthew Strathearn), Advances in Econometrics (Volume 42): The Econometrics of Networks. Editors: Áureo De Paula (UCL), Elie Tamer (Harvard), and Marcel Voia (Carleton), 2019.
  • “Identification and Wavelet Estimation of Weighted ATE in a Class of Switching Regime Models”
    (with Yanqin Fan), Journal of Econometrics, 2019.
  • “The Mode is the Message: Using Paradata to Identify Survey Design Effects”
    (with Geoff Dunbar and Rallye Shen), Advances in Econometrics (Volume 41): Essays in Honor of Cheng Hsiao. Editors: M. Hashem Pesaran (USC), Tong Li (Vanderbilt), and Dek Terrell (LSU), 2019.
  • “Cash versus Card: Payment Discontinuities and the Burden of Holding Coins”
    (with Kim Huynh and Oz Shy), Journal of Banking and Finance, 2019.
  • “Variance Estimation for Survey-Weighted Data Using Bootstrap Resampling Methods: 2013 Methods-of-Payment Survey Questionnaire”
    (with Rallye Shen), Advances in Econometrics (Volume 39): The Econometrics of Complex Survey Data: Theory and Applications. Editors: Gautam Tripathi (U Luxembourg), David Jacho-Chavez (Emory U), Kim P. Huynh (Bank of Canada), 2018.
  • “Measuring Consumer Cash Holdings: Lessons from the 2013 Bank of Canada Methods-of-Payment Survey”
    (with Chris Henry, Kim Huynh, Rallye Shen, Kyle Vincent), Survey Practice, 2016.
  • “Retail Payment Innovations and Cash Usage: Accounting for Attrition Using Refreshment Samples”
    (with Marie-Helene Felt and Kim Huynh), Journal of Royal Statistical Society: Series A, 2016.
  • “Inference for the Correlation Coefficient between Potential Outcomes in the Gaussian Switching Regime Model”
    (with Yanqin Fan and Ruixuan Liu), Journal of Econometrics, 2016.
  • “Sheep in Wolf's Clothing: Using the Least Squares Criterion for Quantile Regression, Economics Letters, 2015.
  • “A Flexible Parametric Approach for Estimating Switching Regime Models and Treatment Effect Parameters”
    (with Yanqin Fan and Jisong Wu), Journal of Econometrics, 2014.

Working papers

  • “Latent group structures with heterogeneous distributions: Identification and Estimation”
    (with Wendun Wang and Xuan Leng).
  • “Quantile Treatment Effects in the Regression Kink Design”
    (with Harold D. Chiang and Yuya Sasaki).
  • “Within-group Estimators for Fixed Effects Quantile Models with Large N and Large T”.
  • “Local Polynomial Wavelet Estimation of the Local Average Treatment Effect”.