Exchange rate premia and discounts for retail purchases using Mexican pesos in El Paso, Texas

Raúl A. Muñoz; Michael J. Pisani; Thomas M. Fullerton

doi:10.1016/j.soscij.2011.03.008

Exchange rate premia and discounts for retail purchases using Mexican pesos in El Paso, Texas

Raúl A. Muñoz, Michael J. Pisani, Thomas M. Fullerton

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2 Scopus citations

Abstract

This paper studies the exchange rates at which Mexican pesos are accepted for retail purchases in El Paso, Texas. A stratified random sample of 586 participating firms is surveyed to examine two aspects of reverse dollarization in the El Paso/Ciudad Juárez border region. The first is to determine the percentage of retail businesses in El Paso that accept foreign currency in the form of Mexican pesos. The results suggest that just over 13.1% (77/586) of all retail firms in this market accept pesos, which on average, comprise 4.35% of total sales for those firms. The second is to calculate the effective exchange rate at which firms accept Mexican pesos. We find that 68.5% of firms accepting the peso do so at a premium. We discern these two aspects further utilizing various multivariate analyses.

Original language	English
Pages (from-to)	612-620
Number of pages	9
Journal	Social Science Journal
Volume	48
Issue number	4
DOIs	https://doi.org/10.1016/j.soscij.2011.03.008
State	Published - Dec 2011

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@article{6a7f4a69b8c54cb8b206d24fe69b4dd1,

title = "Exchange rate premia and discounts for retail purchases using Mexican pesos in El Paso, Texas",

abstract = "This paper studies the exchange rates at which Mexican pesos are accepted for retail purchases in El Paso, Texas. A stratified random sample of 586 participating firms is surveyed to examine two aspects of reverse dollarization in the El Paso/Ciudad Ju{\'a}rez border region. The first is to determine the percentage of retail businesses in El Paso that accept foreign currency in the form of Mexican pesos. The results suggest that just over 13.1% (77/586) of all retail firms in this market accept pesos, which on average, comprise 4.35% of total sales for those firms. The second is to calculate the effective exchange rate at which firms accept Mexican pesos. We find that 68.5% of firms accepting the peso do so at a premium. We discern these two aspects further utilizing various multivariate analyses.",

author = "Mu{\~n}oz, {Ra{\'u}l A.} and Pisani, {Michael J.} and Fullerton, {Thomas M.}",

note = "Funding Information: Financial support for this research was provided by El Paso Electric Company , Hunt Companies of El Paso , Hunt Communities , Texas Department of Transportation , JPMorgan Chase Bank of El Paso , a UTEP College of Business Administration Faculty Research Grant , and the James Foundation Scholarship Fund . Helpful comments were provided by Jim Holcomb, Santiago Ibarreche, and Angel Molina. Econometric research assistance was provided by Sergio Contreras, Karen Fierro, Azucena Gonzalez, Joseph Kababie, Enedina Licerio, Carlos Lino, Teodulo Soto, and Emmanuel Villalobos.",

year = "2011",

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doi = "10.1016/j.soscij.2011.03.008",

language = "English",

volume = "48",

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T1 - Exchange rate premia and discounts for retail purchases using Mexican pesos in El Paso, Texas

AU - Muñoz, Raúl A.

AU - Pisani, Michael J.

AU - Fullerton, Thomas M.

N1 - Funding Information: Financial support for this research was provided by El Paso Electric Company , Hunt Companies of El Paso , Hunt Communities , Texas Department of Transportation , JPMorgan Chase Bank of El Paso , a UTEP College of Business Administration Faculty Research Grant , and the James Foundation Scholarship Fund . Helpful comments were provided by Jim Holcomb, Santiago Ibarreche, and Angel Molina. Econometric research assistance was provided by Sergio Contreras, Karen Fierro, Azucena Gonzalez, Joseph Kababie, Enedina Licerio, Carlos Lino, Teodulo Soto, and Emmanuel Villalobos.

PY - 2011/12

Y1 - 2011/12

N2 - This paper studies the exchange rates at which Mexican pesos are accepted for retail purchases in El Paso, Texas. A stratified random sample of 586 participating firms is surveyed to examine two aspects of reverse dollarization in the El Paso/Ciudad Juárez border region. The first is to determine the percentage of retail businesses in El Paso that accept foreign currency in the form of Mexican pesos. The results suggest that just over 13.1% (77/586) of all retail firms in this market accept pesos, which on average, comprise 4.35% of total sales for those firms. The second is to calculate the effective exchange rate at which firms accept Mexican pesos. We find that 68.5% of firms accepting the peso do so at a premium. We discern these two aspects further utilizing various multivariate analyses.

AB - This paper studies the exchange rates at which Mexican pesos are accepted for retail purchases in El Paso, Texas. A stratified random sample of 586 participating firms is surveyed to examine two aspects of reverse dollarization in the El Paso/Ciudad Juárez border region. The first is to determine the percentage of retail businesses in El Paso that accept foreign currency in the form of Mexican pesos. The results suggest that just over 13.1% (77/586) of all retail firms in this market accept pesos, which on average, comprise 4.35% of total sales for those firms. The second is to calculate the effective exchange rate at which firms accept Mexican pesos. We find that 68.5% of firms accepting the peso do so at a premium. We discern these two aspects further utilizing various multivariate analyses.

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U2 - 10.1016/j.soscij.2011.03.008

DO - 10.1016/j.soscij.2011.03.008

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SN - 0362-3319

VL - 48

SP - 612

EP - 620

JO - Social Science Journal

JF - Social Science Journal

IS - 4

ER -

Exchange rate premia and discounts for retail purchases using Mexican pesos in El Paso, Texas

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