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Debt and depression

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  • Richard Disney
  • Sarah Bridges

Abstract

The paper examines the effect of household financial indebtedness on the psychological well-being of mothers, using a large household survey of families with children for Britain. Although some existing studies find a link between debt and depression, they tend to utilise small and often highly selective samples of people and only self-reported measures of financial stress, responses to which are likely to correlate with other subjective measures of health. Our study constructs a variety of quantitative measures of financial stress and debt difficulties in order to validate selfreported measures. It examines the potential simultaneity of financial and psychological health by appropriate statistical techniques. The results confirm both a direct link between indebtedness and psychological stress and an indirect link through the impact of poor health on economic status.

Suggested Citation

  • Richard Disney & Sarah Bridges, 2006. "Debt and depression," Discussion Papers 06/02, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:06/02
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