The role of financial position on consumer indebted-ness. An empirical analysis in Italy
The paper focuses on the consumer credit market in Italy and on the related risk of over-indebtedness. Using survey panel data, we investigate the impact of overindebtedness on consumption behaviour, evaluating in particular if consumer credit is used to cover gaps in income and if this is associated with an increased and diffused inadequacy of financial and economic conditions of indebted households. Results highlight that a relatively consistent part of consumer credit is concentrated in the hands of financially fragile individuals. Moreover, when considering the amount of debt measured in relative terms, being in a difficult financial position adds 1.0 percentage points to the risk of over-indebtedness compared to households without any financial and economic difficulty
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