Heng Chen

Principal Researcher

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.


Heng Chen

Principal Researcher
Economic Research and Analysis

Bank of Canada
234 Wellington Street
Ottawa, ON, K1A 0G9


2017 Methods-of-Payment Survey: Sample Calibration and Variance Estimation

Technical Report No. 114 Heng Chen, Marie-Hélène Felt, Christopher Henry
This technical report describes sampling, weighting and variance estimation for the Bank of Canada’s 2017 Methods-of-Payment Survey. Under quota sampling, a raking ratio method is implemented to generate weights with both post-stratification and nonparametric nonresponse weight adjustments.
Content Type(s): Technical Reports Topic(s): Econometric and statistical methods JEL Code(s): C, C8, C81, C83

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

The Bank of Canada 2015 Retailer Survey on the Cost of Payment Methods: Calibration for Single-Location Retailers

Technical Report No. 109 Heng Chen, Rallye Shen
Calibrated weights are created to (a) reduce the nonresponse bias; (b) reduce the coverage error; and (c) make the weighted estimates from the sample consistent with the target population in terms of certain key variables.

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.

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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”.

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