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Household debt and happiness: evidence from the China Household Finance Survey

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  • Zhifeng Liu
  • Xueyi Zhong
  • Tingting Zhang
  • Wenquan Li

Abstract

Using the China Household Finance Survey Data, this article studies the effect of household debt on happiness. The empirical results based on the ordered logit model show that (1) total household debt will significantly reduce family’s happiness; (2) the effect of different types of debt on happiness is heterogeneous, and housing debt and education debt are the main sources of this negative effect, while other types of debt have no significant effect; (3) the different sources of housing debt have different effects on happiness, and only nonbank housing debt significantly reduces people’s happiness; and (4) risk attitude plays an important role in the relationship between debt and happiness, where families with a high degree of risk aversion have lower happiness when borrowing money.

Suggested Citation

  • Zhifeng Liu & Xueyi Zhong & Tingting Zhang & Wenquan Li, 2020. "Household debt and happiness: evidence from the China Household Finance Survey," Applied Economics Letters, Taylor & Francis Journals, vol. 27(3), pages 199-205, February.
    • Handle: RePEc:taf:apeclt:v:27:y:2020:i:3:p:199-205
    DOI: 10.1080/13504851.2019.1610706
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    Cited by:

    1. Deng, Xin & Yu, Mingzhe, 2021. "Does the marginal child increase household debt? – Evidence from the new fertility policy in China," International Review of Financial Analysis, Elsevier, vol. 77(C).
    2. Jing Jian Xiao & Chunsheng Tao, 2020. "Consumer finance/household finance: the definition and scope," China Finance Review International, Emerald Group Publishing Limited, vol. 11(1), pages 1-25, June.
    3. Marco Cozzi & Qiushan Li, 2024. "Do wealth shocks matter for the life satisfaction of the elderly? Evidence from the health and retirement study," Economics Bulletin, AccessEcon, vol. 44(1), pages 88-98.
    4. Petar Sorić, 2020. "“Normal†growth of the Chinese economy: new metrics based on consumer confidence data," Economics Bulletin, AccessEcon, vol. 40(2), pages 1740-1746.
    5. Easterlin, Richard A., 2021. "Why Does Happiness Respond Differently to an Increase vs. Decrease in Income?," IZA Discussion Papers 14645, Institute of Labor Economics (IZA).
    6. Liu, Jiankun & He, Xiaobin & Dong, Yinxi, 2024. "Household debt and children’s psychological well-being in China: The mediating role of parent–child relations," Children and Youth Services Review, Elsevier, vol. 157(C).
    7. Zhifeng Liu & Kaixin Li & Tingting Zhang, 2023. "Information diversity and household portfolio diversification," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 3833-3845, October.
    8. Liu, Zhifeng & Huynh, Toan Luu Duc & Dai, Peng-Fei, 2021. "The impact of COVID-19 on the stock market crash risk in China," Research in International Business and Finance, Elsevier, vol. 57(C).
    9. Jiru Song & Mingzheng Hu & Shaojie Li & Xin Ye, 2023. "The Impact Mechanism of Household Financial Debt on Physical Health in China," IJERPH, MDPI, vol. 20(5), pages 1-13, March.
    10. Zhang, Jiaping & Zhang, Huirong & Gong, Xiaomei, 2022. "Mobile payment and rural household consumption: Evidence from China," Telecommunications Policy, Elsevier, vol. 46(3).
    11. Easterlin, Richard A., 2023. "Why does happiness respond differently to an increase vs. decrease in income?," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 200-204.
    12. Aris Hassama & Nor Asmat Ismail, 2024. "Determinants of Cash Waqf Donation to Support Islamic Schools in Thailand," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(1), pages 1265-1278, January.
    13. Zhang, Tingting & Li, Wenquan & Li, Kaixin & Liu, Zhifeng, 2022. "Only words matter? The effects of cognitive abilities on commercial insurance participation," The North American Journal of Economics and Finance, Elsevier, vol. 61(C).
    14. He, Jinfu & Liu, Yu, 2024. "Digital inclusion finance, social governance and household investment decisions," Finance Research Letters, Elsevier, vol. 62(PB).

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