The Borrowing Behaviour of Households: Evidence from the Cyprus Family Expenditure Surveys
This study investigates how various factors affect households demand for borrowing in Cyprus using data from the Family Expenditure Surveys for the years 2002/03 and 2008/09. The descriptive statistics show that middle income households with a younger age head have relatively high gross debt-to-income ratios; whereas upper income households with an older age head tend to have relatively high gross deposits-to-income ratios. The econometric analysis uses smooth (over the life cycle) income to investigate the extent to which household borrowing at a given point in time conforms to long term expectations about future income. The results conform to theoretical expectation insofar as demand for loans is determined by smooth, not current, income. This can be interpreted as an indication that the borrowing behavior of households in Cyprus is rational. Nevertheless, the results in the paper need to be confirmed by further analysis to also account for the dynamics of the borrowing-saving behavior of households.This will be possible when the Household Finance and Consumption Survey is available in Cyprus, hopefully in the near future.
Volume (Year): 5 (2011)
Issue (Month): 2 (December)
|Contact details of provider:|| Postal: P O Box 20537, 1678 Nicosia|
Phone: + 357 22892429
Fax: + 357 22892426
Web page: http://www.ucy.ac.cy/goto/ecorece/el-GR/HOME.aspx
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244, July.
- Campbell, John Y & Mankiw, N Gregory, 1990.
"Permanent Income, Current Income, and Consumption,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 8(3), pages 265-79, July.
- John Y. Campbell & N. Gregory Mankiw, 1987. "Permanent Income, Current Income, and Consumption," NBER Working Papers 2436, National Bureau of Economic Research, Inc.
- Campbell, John Y. & Mankiw, N. Gregory, 1990. "Permanent Income, Current Income, and Consumption," Scholarly Articles 3353762, Harvard University Department of Economics.
- Mark Kazarosian, 1997.
"Precautionary Savings-A Panel Study,"
The Review of Economics and Statistics,
MIT Press, vol. 79(2), pages 241-247, May.
- Georgarakos, Dimitris & Lojschová, Adriana & Ward-Warmedinger, Melanie, 2010.
"Mortgage indebtedness and household financial distress,"
Working Paper Series
1156, European Central Bank.
- Georgarakos, Dimitris & Lojschova, Adriana & Ward-Warmedinger, Melanie E., 2009. "Mortgage Indebtedness and Household Financial Distress," IZA Discussion Papers 4631, Institute for the Study of Labor (IZA).
When requesting a correction, please mention this item's handle: RePEc:erc:cypepr:v:5:y:2011:i:2:p:57-83. 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: (Angela Shekersavva)
If references are entirely missing, you can add them using this form.