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Do we know what we owe? A comparison of borrower- and lender-reported consumer debt

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Abstract

Household surveys are the source of some of the most widely studied data on consumer balance sheets, with the Survey of Consumer Finances (SCF) generally cited as the leading source of wealth data for the United States. At the same time, recent research questions survey respondents’ propensity and ability to report debt characteristics accurately. We compare household debt as reported by borrowers to the SCF with household debt as reported by lenders to Equifax using the new FRBNY Consumer Credit Panel (CCP). Moments of the borrower and lender debt distributions are compared by year, age of household head, household size, and region of the country, in total and across five standard debt categories. Our central finding is that the SCF and CCP debt patterns are strikingly similar. There are, however, two noteworthy exceptions: The aggregate credit card debt implied by SCF borrowers’ reports is estimated to be between 60 and 63 percent of that implied by CCP lenders’ reports, and the aggregate student debt implied by the SCF is roughly 75 percent of that implied by the CCP. Despite the credit card debt mismatch, bankruptcy history is reported comparably in the borrower and lender sources, indicating that not all stigmatized consumer behaviors are underreported.

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  • Brown, Meta & Haughwout, Andrew F. & Lee, Donghoon & Van der Klaauw, Wilbert, 2011. "Do we know what we owe? A comparison of borrower- and lender-reported consumer debt," Staff Reports 523, Federal Reserve Bank of New York, revised 01 Oct 2013.
  • Handle: RePEc:fip:fednsr:523
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    Cited by:

    1. Lochner, Lance & Monge-Naranjo, Alexander, 2014. "Student Loans and Repayment: Theory, Evidence and Policy," Working Papers 2014-40, Federal Reserve Bank of St. Louis, revised 12 Nov 2014.
    2. Whitaker, Stephan, 2015. "Big Data versus a Survey," Working Paper 1440, Federal Reserve Bank of Cleveland.
    3. Coibion, Olivier & Gorodnichenko, Yuriy & Kudlyak, Marianna & Mondragon, John, 2014. "Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data," Working Paper 14-1, Federal Reserve Bank of Richmond.
    4. Jagtiani, Julapa & Li, Wenli, 2014. "Credit access after consumer bankruptcy filing: new evidence," Working Papers 14-25, Federal Reserve Bank of Philadelphia.
    5. Meta Brown & John Grigsby & Wilbert van der Klaauw & Jaya Wen & Basit Zafar, 2016. "Financial Education and the Debt Behavior of the Young," Review of Financial Studies, Society for Financial Studies, pages 2490-2522.
    6. Coibion, Olivier & Gorodnichenko, Yuriy & Kudlyak, Marianna & Mondragon, John, 2014. "Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data," IZA Discussion Papers 7910, Institute for the Study of Labor (IZA).
    7. Lawrence M. Berger & J. Michael Collins & Laura Cuesta, 2016. "Household Debt and Adult Depressive Symptoms in the United States," Journal of Family and Economic Issues, Springer, vol. 37(1), pages 42-57, March.
    8. Alice M. Henriques & Joanne W. Hsu, 2014. "Analysis of Wealth Using Micro- and Macrodata: A Comparison of the Survey of Consumer Finances and Flow of Funds Accounts," NBER Chapters,in: Measuring Economic Sustainability and Progress, pages 245-274 National Bureau of Economic Research, Inc.
    9. Krimmel, Jacob & Moore, Kevin B. & Sabelhaus, John & Smith, Paul, 2013. "The current state of U.S. household balance sheets," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 337-359.
    10. Alice M. Henriques & Joanne W. Hsu, 2013. "Analysis of wealth using micro and macro data: a comparison of the Survey of Consumer Finances and Flow of Funds Accounts," Finance and Economics Discussion Series 2013-46, Board of Governors of the Federal Reserve System (U.S.).
    11. Bleemer, Zachary & Brown, Meta & Lee, Donghoon & Van der Klaauw, Wilbert, 2014. "Tuition, jobs, or housing: what's keeping millennials at home?," Staff Reports 700, Federal Reserve Bank of New York, revised 01 Jul 2017.

    More about this item

    Keywords

    consumer debt; measurement;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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