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Proceso de Endeudamiento y Sobre Endeudamiento de los Hogares en Chile

Author

Listed:
  • Jaime Ruiz-Tagle
  • Leidy García
  • Álvaro Miranda

Abstract

During the last years Chile has experienced a great expansion in access to household credit. This has led to important increases of indebtedness, in particular by the poorest income quintile. In this paper we analyze the evolution and the determinants of debt and over-indebtedness in last decade, as well as the robustness of the changes, using the Survey of Household Finances and the Social Protection Survey. The study also explores the role of shocks and preferences of individuals on household debt. The analysis shows that participation in indebtedness grows with income. We also find that the ratios of debt of the first quintile diminish significantly when considering the earning capacity of the household, so it can be inferred that this quintile would be less indebted than what can be thought from traditional indicators. On the other hand, the paper concludes that the effects of shocks (of health, income and spending on education) in the over-indebtedness are heterogeneous according to the different measures of debt used. Besides, it appears that individual characteristics such as having self-control problems, low self-esteem and low financial literacy are correlated with the level of household indebtedness.

Suggested Citation

  • Jaime Ruiz-Tagle & Leidy García & Álvaro Miranda, 2013. "Proceso de Endeudamiento y Sobre Endeudamiento de los Hogares en Chile," Working Papers Central Bank of Chile 703, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:703
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_703.pdf
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    References listed on IDEAS

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    1. José Miguel Matus & Nancy Silva & Alejandra Marinovic & Karla Flores, 2010. "Una Visión Global de la Deuda Financiera de los Hogares Chilenos en la Última Década," Economic Statistics Series 81, Central Bank of Chile.
    2. Rodrigo Alfaro & Natalia Gallardo & Roberto Stein, 2010. "The Determinants of Household Debt Defa," Working Papers Central Bank of Chile 574, Central Bank of Chile.
    3. S M Finlay, 2006. "Predictive models of expenditure and over-indebtedness for assessing the affordability of new consumer credit applications," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(6), pages 655-669, June.
    4. James X. Sullivan, 2008. "Borrowing During Unemployment: Unsecured Debt as a Safety Net," Journal of Human Resources, University of Wisconsin Press, vol. 43(2), pages 383-412.
    5. Hugo Salgado & Alejandra Chovar, 2010. "¿Cuánto Influyen las Tarjetas de Crédito y la Deuda Hipotecaria en el Sobre Endeudamiento de los Hogares en CHile," Working Papers 12-2010, Departamento de Economía, Universidad de Concepción.
    6. Felipe Martínez & Rodrigo Cifuentes & Carlos Madeira & Rubén Poblete-Cazenave, 2013. "Measurement of Household Financial Risk with the Survey of Household Finances," Working Papers Central Bank of Chile 682, Central Bank of Chile.
    7. Tullio Jappelli & Marco Pagano & Marco Di Maggio, 2013. "Households' indebtedness and financial fragility," Journal of Financial Management, Markets and Institutions, Società editrice il Mulino, issue 1, pages 23-46, January.
    8. Jaime Ruiz-Tagle & Francis Vella, 2010. "Borrowing Constraints and Credit Demand," Working Papers Central Bank of Chile 578, Central Bank of Chile.
    9. Daniel J. Benjamin & Sebastian A. Brown & Jesse M. Shapiro, 2013. "Who Is ‘Behavioral’? Cognitive Ability And Anomalous Preferences," Journal of the European Economic Association, European Economic Association, vol. 11(6), pages 1231-1255, December.
    10. Tullio Jappelli, 1990. "Who is Credit Constrained in the U. S. Economy?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(1), pages 219-234.
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    Cited by:

    1. Daniel Hojman & Alvaro Miranda & Jaime Ruiz-Tagle, 2013. "Over Indebtedness and Depression: Sad Debt or Sad Debtors?," Working Papers wp385, University of Chile, Department of Economics.
    2. Lemus, Antonio & Pulgar, Carlos, 2021. "Households’ Debt Thresholds: A Market Aspects Approach," MPRA Paper 106958, University Library of Munich, Germany.
    3. González, Felipe, 2017. "Privatized Keynesianism or conspicuous consumption? Status anxiety and the financialization of consumption in Chile," MPIfG Discussion Paper 17/3, Max Planck Institute for the Study of Societies.
    4. Rodrigo Cifuentes & Felipe Martínez, 2020. "Over-indebtedness in Households: Measurement and Determinants," Working Papers Central Bank of Chile 869, Central Bank of Chile.
    5. Delgado Fuentealba, Carlos L. & Muñoz Mendoza, Jorge A. & Sepúlveda Yelpo, Sandra M. & Veloso Ramos, Carmen L. & Fuentes-Solís, Rodrigo A., 2021. "Household debt, automatic bill payments and inattention: Theory and evidence," Journal of Economic Psychology, Elsevier, vol. 85(C).

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