Does the Use of Community Currency Change Pain of Paying and Willingness to Pay?

Abstract

Some countries worldwide have adopted and utilized community currencies, and one of the vital and critical purposes of many community currencies is to revitalize the local community. In light of such a potentially significant recent economic phenomenon, this paper examines how and to what extent a community currency effectively promotes purchases. Specifically, this paper focuses on two key characteristics common to many community currencies: their restricted usability to a specific area and their purpose of community revitalization, while investigating how these characteristics affect changes in consumers’ pain of paying and willingness to pay. Through analysis of a survey of approximately 2,000 Japanese, this paper confirms that a currency with the explicit purpose of stimulating the local economy reduces pain of paying; on the other hand, it does not confirm the result that a currency that can be used only in a limited area promotes purchases.