The impact of unsecured debt on financial distress among British households

No 512, Working Papers from Banco de España

Abstract: This paper uses evidence from the British Household Panel Survey (BHPS) to examine how attitudes towards unsecured debt are related to household finances and other characteristics. An ordered logit model is estimated for 1995 and 2000 using a self reported indicator of financial distress as the dependent variable. This analysis suggests that the main factors causing debt problems are the unsecured debt income ratio, the level of mortgage income gearing, the level of financial wealth of households, their health, ethnicity and marital status. While the proportion of households reporting debt problems did not change between 1995 and 2000, there were important shifts among different groups. In particular, more households in the youngest age group reported debt repayments were a heavy burden in 2000, while the opposite applies to the oldest age group where a smaller proportion of households than in 1995 reported debt was a heavy burden. These changes can largely be accounted for by the changing economic circumstances of these groups rather than an unrelated shift in attitudes. In particular, the increase in indebtedness of the young was the main factor accounting for their greater tendency to report debt problems.

Keywords: unsecured debt; british household panel survey; ordered-logit (search for similar items in EconPapers)
JEL-codes: C25 D14 D91 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2005-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/05/Fic/dt0512e.pdf First version, May 2005 (application/pdf)

Related works:
Working Paper: The impact of unsecured debt on financial distress among British households (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0512

Access Statistics for this paper

More papers in Working Papers from Banco de España Contact information at EDIRC.
Bibliographic data for series maintained by Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España ().