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The Multi-dimensional Effect of Household Debt on Urban Individual Well-Being in Klang Valley Malaysia

Author

Listed:
  • Yunchao Cai

    (Ankang University)

  • Selamah Abdullah Yusof

    (International Islamic University Malaysia)

  • Ruzita Bt Mohd Amin

    (International Islamic University Malaysia)

  • Mohd Nahar Mohd Arshad

    (International Islamic University Malaysia)

Abstract

Debt is beneficiary to individuals and households when their consumption can be extended with credit. However, the benefits gained from availability of credit have negative implications, and research on indebtedness has become a focus of many scholars from different fields of study. Therefore, this research sought to explore the implications of household debt on individuals’ social and economic well-being by using 407 sample data collected from the urban households in Klang Valley, Malaysia. Several regression models were applied to investigate the impact of household debt on individual’s well-being from various aspects such as economic, psychological, physical health and family relationships. The principle finding was that the impact of household debt extended beyond the economic aspect to all the other three dimensions as well. However, the analysis shows that there are differences with regard to the extent of the impact across the four aspects. The highest impact is on the psychological well-being, compared to other dimensions of well-being. Furthermore, the research also found there is a clear difference between the effect of secured loan and unsecured loan on the social and economic well-being.

Suggested Citation

  • Yunchao Cai & Selamah Abdullah Yusof & Ruzita Bt Mohd Amin & Mohd Nahar Mohd Arshad, 2021. "The Multi-dimensional Effect of Household Debt on Urban Individual Well-Being in Klang Valley Malaysia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(1), pages 23-44, November.
    • Handle: RePEc:spr:soinre:v:158:y:2021:i:1:d:10.1007_s11205-021-02706-7
    DOI: 10.1007/s11205-021-02706-7
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    2. Ryszard Kowalski & Agnieszka Strzelecka & Agnieszka Wałęga & Grzegorz Wałęga, 2023. "Do Children Matter to the Household Debt Burden?," Journal of Family and Economic Issues, Springer, vol. 44(4), pages 1007-1022, December.

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