A bigger house at the cost of an empty fridge? : the effect of households' indebtedness on their consumption : micro-evidence using Belgian HFCS data
Philip Du Caju, Guillaume Périlleux, François Rycx, Ilan Tojerow
This paper investigates the potentially non-linear relation between households' indebtedness and their consumption between 2010 and 2014 in Belgium, using panel data from the two waves of the Household Finance and Consumption Survey. Unlike previous studies, we find a negative effect of households' indebtedness on their consumption, even in the absence of negative shock on their assets. Our findings suggest that, without such a shock, it is the day-to-day sustainability of the debt, rather than its overall sustainability, that leads households to reduce their consumption. We perform as well a threshold analysis, whose results suggest that households should not have a debt-service-to-income ratio greater than 30%. The effect appears to be robust to various specifications, to result from a trade-off between housing and consumption, and to be more prevalent among more fragile households.
Year of publication: |
2021
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Authors: | Du Caju, Philip ; Périlleux, Guillaume ; Rycx, François ; Tojerow, Ilan |
Publisher: |
Essen : Global Labor Organization (GLO) |
Subject: | Households | Indebtedness | Consumption | Debt-Service-to-Income | Non-linear Heterogeneous Effects | Privater Haushalt | Household | Private Verschuldung | Private debt | Belgien | Belgium | Privater Konsum | Private consumption | Schätzung | Estimation | Immobilienpreis | Real estate price |
Saved in:
freely available
Extent: | 1 Online-Ressource (circa 59 Seiten) Illustrationen |
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Series: | GLO discussion paper. - Essen : [Global Labor Organization (GLO], ZDB-ID 2951901-9. - Vol. no. 799 |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper |
Language: | English |
Other identifiers: | hdl:10419/232007 [Handle] |
Classification: | D12 - Consumer Economics: Empirical Analysis ; D14 - Personal Finance ; E21 - Consumption; Saving |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012494203