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The role of financial position on consumer indebted-ness. An empirical analysis in Italy

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  • Barbara Cavalletti

    ()
    (University of Genoa, Italy)

  • Corrado Lagazio

    ()
    (University of Genoa, Italy)

  • Daniela Vandone

    ()
    (University of Milan, Italy)

  • Elena Lagomarsino

    (University of Genoa, Italy)

Abstract

The paper focuses on the consumer credit market in Italy and on the related risk of over-indebtedness. Using survey panel data, we investigate the impact of overindebtedness on consumption behaviour, evaluating in particular if consumer credit is used to cover gaps in income and if this is associated with an increased and diffused inadequacy of financial and economic conditions of indebted households. Results highlight that a relatively consistent part of consumer credit is concentrated in the hands of financially fragile individuals. Moreover, when considering the amount of debt measured in relative terms, being in a difficult financial position adds 1.0 percentage points to the risk of over-indebtedness compared to households without any financial and economic difficulty

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File URL: http://www.dep.unige.it/RePEc/gea/wpaper/dwpo-8-sep2012.pdf
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Bibliographic Info

Paper provided by University of Genoa, Research Doctorate in Public Economics in its series DEP - series of economic working papers with number 8/2012.

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Date of creation: Sep 2012
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Handle: RePEc:gea:wpaper:8/2012

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Keywords: household indebtedness; consumer credit; over-indebtedness; permanent income hypothesis;

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