Italian Household Debt after the 2008 Crisis

Magri, Silvia; Pico, Raffaella

doi:10.2139/ssrn.2176215

Cited by 4 publications

(1 citation statement)

References 3 publications

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“…Objective over-indebtedness indicators based on the quantitative ratios, such as debt to income (DTI), debt to wealth or assets (DTW/DTA), and debt-service to income (DSTI) are employed by many authors (Brown and Taylor 2008;Faruqui 2008;Keese 2009;Magri and Pico 2012;Jappelli et al 2013). Some of them use these indicators to distinguish between secured and unsecured debt (del Rio and Young 2008;French and Vigne 2018).…”

Section: Definition and Measurement Of Over-indebtednessmentioning

confidence: 99%

Over-indebted Households in Poland: Classification Tree Analysis

Wałęga

2020

Soc Indic Res

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Increasing a personal debt burden implies greater financial vulnerability and threats for macroeconomic stability. It also generates a risk of the households over-indebtedness. The assessment of over-indebtedness is conducted with the use of various objective and subjective measures based on the micro-level data. The aim of the study is to investigate over-indebted households in Poland using a unique dataset obtained from the CATI survey. We discuss and compare the usefulness of various over-indebtedness measures across different socio-economic characteristics. Due to the differences in over-indebtedness across single measures, we perform a more complex assessment using a mix of indicators. As an alternative to other commonly criticised over-indebtedness measures, we apply the “below the poverty line” (BPL) measure. In order to obtain the profile of over-indebted households, we use classification and regression tree analysis as an alternative to logit or probit models. We find that DSTI (“debt service to income”) ratio underestimates the extent of over-indebtedness in vulnerable groups of households in comparison with the BPL. We highlight the necessity to use different measures depending on the adopted definition of over-indebtedness. A psychological burden of debts is particularly strong among older and poorly educated respondents. We also find that the age structure of over-indebted households in Poland differs from this structure in countries with a broader access to consumer credits. Our results can be used to enrich the methods of assessing the household over-indebtedness.

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Section: Definition and Measurement Of Over-indebtednessmentioning

confidence: 99%

Over-indebted Households in Poland: Classification Tree Analysis

Wałęga

2020

Soc Indic Res

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Household Debt in OECD Countries: The Role of Supply-Side and Demand-Side Factors

2018

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In many countries, household debt increased from the 1990s until the global financial crisis of 2007-2008 and then stagnated with the Great Recession, the euro-area sovereign debt crisis and deleveraging. In spite of these common trends, differences in national household debt/disposable income ratios are evident. This paper studies the determinants of household debt using a dataset of 33 countries and taking into account both demand-side and supply-side factors. The econometric exercises, covering the period 1995-2016, yield the following results. First, there is a positive link between household debt and both household wealth and house price growth. Second, the quality of bankruptcy laws relates positively to household debt, whereas longer insolvency resolution times are associated with lower household debt. Third, Anglo-Saxon legal origin and Scandinavian legal origin have a stronger link with household debt than French and German legal origin. Fourth, household debt is higher in countries with social-democratic and liberal welfare models than in conservative and Eastern European welfare states. Fifth, the ratio of public debt to GDP displays a negative association with private debt. Last, the effect of saving on household debt is significant only in the years of household deleveraging, i.e. after the global financial crisis. While the effect of demand-side variables is unstable over time, supply-side variables appear to be more persistent in determining the level of household debt.

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Is Financial Fragility a Matter of Illiquidity?: An Appraisal for Italian Households

2011

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In this paper we investigate household financial fragility and assess the role played by the composition of the household portfolio besides standard determinants of this condition (e.g. income, indebtedness, age, gender, financial literacy). We take the case of Italy, given the very peculiar portfolio composition (high level of housing and low level of indebtedness and portfolio diversification) and provide two main contributions. First, we propose a novel definition of financial fragility. Second, based on this new measure, we use data from the 1998-2010 Bank of Italy Survey on Household Income and Wealth to investigate the determinants of this condition. Our results confirm most usual markers of financial fragility and additionally highlight the role of homeownership, which is not related to the presence of mortgages but it is rather connected to specific socio-demographic features such as age and marital status.

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Italian Household Debt after the 2008 Crisis

Cited by 4 publications

References 3 publications

Over-indebted Households in Poland: Classification Tree Analysis

Over-indebted Households in Poland: Classification Tree Analysis

Household Debt in OECD Countries: The Role of Supply-Side and Demand-Side Factors

Is Financial Fragility a Matter of Illiquidity?: An Appraisal for Italian Households

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