Is Financial Fragility a Matter of Illiquidity? An Appraisal for Italian Households
In this paper we investigate household financial fragility and assess the role played by the composition of the household portfolio besides standard determinants of this condition (e.g. income, indebtedness, age, gender, financial literacy). We take the case of Italy, given the very peculiar portfolio composition (high level of housing and low level of indebtedness and portfolio diversification) and provide two main contributions. First, we propose a novel definition of financial fragility. Second, based on this new measure, we use data from the 1998-2010 Bank of Italy Survey on Household Income and Wealth to investigate the determinants of this condition. Our results confirm most usual markers of financial fragility and additionally highlight the role of homeownership, which is not related to the presence of mortgages but it is rather connected to specific socio-demographic features such as age and marital status.
|Date of creation:||18 Jul 2012|
|Date of revision:||18 Jul 2012|
|Contact details of provider:|| Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma|
Web page: http://www.ceistorvergata.it
More information through EDIRC
|Order Information:|| Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma|
Web: http://www.ceistorvergata.it Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Georgarakos, Dimitris & Lojschova, Adriana & Ward-Warmedinger, Melanie E., 2009.
"Mortgage Indebtedness and Household Financial Distress,"
IZA Discussion Papers
4631, Institute for the Study of Labor (IZA).
- Georgarakos, Dimitris & Lojschová, Adriana & Ward-Warmedinger, Melanie, 2010. "Mortgage indebtedness and household financial distress," Working Paper Series 1156, European Central Bank.
- Olsen, Randall & Dunn, Lucia, 2010. "Housing price declines and household balance sheets," Economics Letters, Elsevier, vol. 107(2), pages 161-164, May.
- Marianna Brunetti & Costanza Torricelli, 2010. "Population age structure and household portfolio choices in Italy," The European Journal of Finance, Taylor & Francis Journals, vol. 16(6), pages 481-502.
- Tullio Jappelli & Marco Pagano & Marco di Maggio, 2008.
"Households’ Indebtedness and Financial Fragility,"
CSEF Working Papers
208, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 Sep 2010.
- Jappelli Tullio & Pagano Marco & Di Maggio Marco, 2013. "Households' indebtedness and financial fragility," Journal of Financial Management, Markets and Institutions, Società editrice il Mulino, issue 1, pages 23-46, January.
- Sarah Brown & Karl Taylor, 2008. "Household debt and financial assets: evidence from Germany, Great Britain and the USA," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(3), pages 615-643.
- Mizuho Kida, 2009. "Financial vulnerability of mortgage-indebted households in New Zealand - evidence from the Household Economic Survey," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 72, pages 5-12, March.
- Marcelo Fuenzalida & Jaime Ruiz-Tagle, 2009.
"Households’ Financial Vulnerability,"
Working Papers Central Bank of Chile
540, Central Bank of Chile.
- Marcelo Fuenzalida C. & Jaime Ruiz-Tagle V., 2009. "Households’ Financial Vulnerability," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 12(2), pages 35-53, August.
- Marcelo Fuenzalida & Jaime Ruiz-Tagle, 2011. "Household Financial Vulnerability," Central Banking, Analysis, and Economic Policies Book Series, in: Rodrigo Alfaro (ed.), Financial Stability, Monetary Policy, and Central Banking, edition 1, volume 15, chapter 10, pages 299-326 Central Bank of Chile.
- Holger Kraft & Claus Munk, 2011. "Optimal Housing, Consumption, and Investment Decisions over the Life Cycle," Management Science, INFORMS, vol. 57(6), pages 1025-1041, June.
- McCarthy, Yvonne, 2011.
"Behavioural characteristics and financial distress,"
Working Paper Series
1303, European Central Bank.
- McCarthy, Yvonne, 2011. "Behavioural Characteristics and Financial Distress," Research Technical Papers 6/RT/11, Central Bank of Ireland.
- Yvonne McCarthy, 2011. "Behavioural Characteristics and Financial Distress," BCL working papers 59, Central Bank of Luxembourg.
- Umar Faruqui, 2008. "Indebtedness and the Household Financial Health: An Examination of the Canadian Debt Service Ratio Distribution," Staff Working Papers 08-46, Bank of Canada.
- Elena Giarda, 2010. "Persistency of financial distress amongst Italian households: evidence from dynamic probit models," Quaderni di Dipartimento 3, Department of Statistics, University of Bologna.
When requesting a correction, please mention this item's handle: RePEc:rtv:ceisrp:242. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Barbara Piazzi)
If references are entirely missing, you can add them using this form.