Household debt and social interactions
Debt-induced crises, including the subprime, are usually attributed exclusively to supply-side factors. We examine the role of social influences on debt culture, emanating from perceived average income of peers. Utilizing unique information from a household survey representative of the Dutch population, that circumvents the issue of defining the social circle, we consider collateralized, consumer, and informal loans. We find robust social effects on borrowing, especially among those who consider themselves poorer than their peers; and on indebtedness, suggesting a link to financial distress. We employ a number of approaches to rule out spurious associations and to handle correlated effects.
| Author: | Dimitris Georgarakos, Michael Haliassos, Giacomo Pasini |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-240863 |
| Series (Serial Number) | CFS working paper series (2012, 05) |
| Publisher: | Goethe-Univ., House of Finance, Center for Financial Studies |
| Place of publication: | Frankfurt am Main |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 03.04.2012 |
| Year of first Publication: | 2012 |
| Publishing Institution: | Univ.-Bibliothek Frankfurt am Main |
| Tag: | Consumer Credit; Household Debt; Household Finance; Informal Loans; Mortgages; Social Interactions |
| Pagenumber: | 44 |
| HeBIS PPN: | 311803695 |
| Institutes: | Wirtschaftswissenschaften |
| Center for Financial Studies (CFS) | |
| Dewey Decimal Classification: | 330 Wirtschaft |
| JEL-Classification: | E21 Consumption; Saving; Wealth |
| G10 General | |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Veröffentlichungsvertrag für Publikationen ohne Print on Demand |
