Household over-indebtedness: definition and measurement with Italian data
AbstractThe last decade has seen significant increases in consumer indebtedness in western countries, causing concern about its economic and social impact. In particular, over-indebtedness is attracting attention from national and international authorities because of its potential effect on both the sustainability of households’ indebtedness and the stability of the financial system. From a social point of view, the excessive accumulation of debts accompanied by households’ liquidity constraints causes a deterioration in households’ social and economic well-being, thus leading in the long term to social exclusion and poverty. The aim of this paper is to present and analyze the main measures of over-indebtedness used in the literature. In particular, the paper uses data from the Italian Survey of Household Income and Wealth to extend the existing knowledge about the possible ways of measuring economic difficulty and over-indebtedness. The traditional and the new measures of over-indebtedness are subsequently compared with the measures of poverty in order to disentangle the relationship between the two phenomena.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Questioni di Economia e Finanza (Occasional Papers) with number 149.
Date of creation: Feb 2013
Date of revision:
household debts; over-indebtedness; poverty;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
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