IDEAS home Printed from
   My bibliography  Save this article

Consumer over-indebtedness in the EU: measurement and characteristics


  • Gianni Betti
  • Neil Dourmashkin
  • Mariacristina Rossi
  • Ya Ping Yin


Purpose - This paper seeks to measure and characterise the extent of consumer over-indebtedness among the European Union (EU) member states. Design/methodology/approach - The study evaluates alternative measures of over-indebtedness on the basis of the permanent-income/life-cycle theories of consumption behaviour and adopts a subjective approach in identifying over-indebted households on the basis of European household survey data. It then investigates the main characteristics of over-indebted households. Findings - The empirical results reveal that over-indebtedness was a significant problem across EU member states in the mid-1990s. Moreover, an inverse relationship emerged between the extent of the over-indebtedness problem and the extent of consumer borrowing across EU countries. Research limitations/implications - Anecdotal evidence seemed to suggest that some main factors behind over-indebtedness could be “market failure” on the credit market, the existence of liquidity constraints and lack of access to formal credit markets. However, a comprehensive and rigorous investigation of the extent and determinants of over-indebtedness can only be achieved through analysis of more extended household data sets, particularly panel data. Practical implications - The EU credit markets exhibited certain symptoms of “market failure”, on the one hand, and there was also need for further financial liberalisation in the Southern European countries, on the other hand. Originality/value - The paper provides a first systematic evaluation of existing measures of consumer over-indebtedness as well as the first EU-wide empirical investigation of the problem. It should provide valuable information to the credit industry as well as financial regulatory bodies.

Suggested Citation

  • Gianni Betti & Neil Dourmashkin & Mariacristina Rossi & Ya Ping Yin, 2007. "Consumer over-indebtedness in the EU: measurement and characteristics," Journal of Economic Studies, Emerald Group Publishing, vol. 34(2), pages 136-156, May.
  • Handle: RePEc:eme:jespps:v:34:y:2007:i:2:p:136-156

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item


    Consumers; Debt; European Union;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:34:y:2007:i:2:p:136-156. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.