This study analyzes the effect of individual finances (specifically creditworthiness and severely delinquent debt) on … is utilized in an instrumental variables design. The possibility of the reverse causality of bad health causing debt and … 2005 residence. Worsening creditworthiness and increases in severely delinquent debt are found to lead to increases in …

unsustainable levels of debt. Using survey data from South Africa, we confirm that poor people are indeed overly optimistic, and … also that optimism is positively and significantly related to debt accumulation. …