Household Debt and Financial Assets: Evidence from Great Britain, Germany and the United States
AbstractWe explore the determinants of debt and financial asset accumulation at the household level using survey data for Great Britain, Germany and the United States (US). Given that debt and assets are both components of a household’s financial portfolio, we explore the degree of inter-dependence between households’ assets and liabilities by jointly modelling these two aspects of the portfolio. Indeed, our empirical findings for both countries support a high degree of inter-dependence between debt and asset holding. Furthermore, the nature of this inter-dependence varies across income ranges and age groups with the weakest correlation between financial assets and debt being found for the lowest income groups in Great Britain, suggesting that such groups may be particularly vulnerable to adverse financial shocks. Evidence supporting inter-dependence between assets and debt no longer remains, however, once we focus on debtors which suggests that households in debt may potentially face difficulties following adverse changes in their financial situation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 05/5.
Date of creation: Mar 2005
Date of revision:
Contact details of provider:
Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
Phone: +44 (0)116 252 2887
Fax: +44 (0)116 252 2908
Web page: http://www2.le.ac.uk/departments/economics
More information through EDIRC
Find related papers by JEL classification:
- D14 - Microeconomics - - Household Behavior - - - Personal Finance
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Mario alejandro González & John Jairo León, .
"Análisis del Endeudamiento de los Hogares Colombianos,"
Borradores de Economia
452, Banco de la Republica de Colombia.
- González Mario Alejandro & John Jairo León, 2007. "Análisis del endeudamiento de los hogares colombianos," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE.
- Mario Alejandro Gónzalez & John Jairo León, 2007. "Análisis del Endeudamiento de los Hogares Colombianos," BORRADORES DE ECONOMIA 004020, BANCO DE LA REPÚBLICA.
- Herrala, Risto & Kauko, Karlo, 2007. "Household loan loss risk in Finland – estimations and simulations with micro data," Research Discussion Papers 5/2007, Bank of Finland.
- Sarah Brown & Gaia Garino & Karl Taylor, 2008. "Household Finances and Attitudes towards Risk," Working Papers 2008005, The University of Sheffield, Department of Economics, revised Dec 2009.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mrs. Alexandra Mazzuoccolo).
If references are entirely missing, you can add them using this form.