Consumer Bankruptcy Stigma: Understanding Relationships with Familiarity and Perceived Control

Chin, Alycia; Cohen, Taya R.; Lindblad, Mark

doi:10.1111/joca.12206

Cited by 12 publications

(7 citation statements)

References 43 publications

(107 reference statements)

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“…There is an extensive literature on the stigmatization of mental illness, physical illness, physical differences, and addiction (e.g., Fife and Wright 2000; Lang and Rosenberg 2017; Lawrence et al 2010; Moisio and Beruchashvili 2010). There is also research on stigma in marketing and consumption domains (e.g., Argo and Main 2008; Chaney, Sanchez, and Maimon 2019; Harmeling et al 2021; Meyer et al 2020; Mirabito et al 2016) and research in the financial area (Chin, Cohen, and Lindblad 2019; Efrat 2006; Gathergood 2012; Gladstone et al 2021; Henry, Garbarino, and Voola 2013; Keene, Cowan, and Baker 2015). Stigmatization is the devaluation of an individual who is believed to possess a stigma and may be experienced as negative evaluations, negative emotional reactions, exclusion, teasing, loss of status and opportunities, undesirable labeling, and/or discrimination (Crocker, Major, and Steele 1998; Crockett 2017; Major and O’Brien 2005).…”

Section: Conceptual Developmentmentioning

confidence: 99%

Helping Those That Hide: Anticipated Stigmatization Drives Concealment and a Destructive Cycle of Debt

Moorhouse¹,

Goode²,

Cotte³

et al. 2023

Journal of Marketing Research

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Debt accumulation has been linked to materialism, impulsivity, short sightedness, self-control, and lifestyle preferences. However, applying stigma theory allows novel insights into debt accumulation for middle class individuals who access a variety of credit-related products. The authors define anticipated stigmatization of debt as the negative judgment and discrimination an individual expects to experience because of their consumer indebtedness. Results from a series of studies demonstrate that although financial stress motivates behaviors designed to reduce debt, debtors who anticipate stigmatization perform a variety of concealment behaviors (secrecy, social spending, and help avoidance) that hinder debt reduction and have negative effects on well-being. To understand how to help these individuals, the authors collaborated with a financial education company, designing a field experiment to examine the efficacy of a behavior change course. Individuals who anticipated stigmatization and formed new social connections in a community-based condition reduced their consumer debt. While the emotional effect of community-based support has been examined in other stigma contexts, this study is the first to investigate the effect on well-being in a debt context, and the first to link social benefits to actual behavior change in terms of debt reduction behaviors and debt repayment.

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Section: Conceptual Developmentmentioning

confidence: 99%

Helping Those That Hide: Anticipated Stigmatization Drives Concealment and a Destructive Cycle of Debt

Moorhouse¹,

Goode²,

Cotte³

et al. 2023

Journal of Marketing Research

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show abstract

“…Some of the authors have argued that over time there has been a decrease in social stigma and thus defaults rates are rising (Athreya, 2004; Gross and Souleles, 2002). Moreover, social stigma is weak for those borrowers who are familiar with the defaults of other individual in their social circle (Chin et al , 2018).…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

Credit scoring of small and medium enterprises: a behavioural approach

Goel

Rastogi

2021

JEEE

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Purpose This study aims to formulate a behavioural credit scoring models for Indian small and medium enterprises (SME) entrepreneurs using certain behavioural and psychological constructs. Two separate models are built which can predict the credit default and wilful default of the borrowers, respectively. This research was undertaken to understand whether certain psychological and behavioural factors can significantly predict the borrowers’ credit and wilful default. Design/methodology/approach A questionnaire survey was undertaken by SME entrepreneurs of two Indian states, i.e. Uttar Pradesh and Maharashtra. The questionnaire had two dependent variables: wilful default and credit default and nine independent variables. The questionnaire reliability and validity were ensured through confirmatory factor analysis (CFA) and further a model was built using logistic regression. Findings The results of this study have shown that certain behavioural and psychological traits of the borrowers can significantly predict borrowers’ default. These variables can be used to predict the overall creditworthiness of SME borrowers. Practical implications The findings of this research indicate that using behavioural and psychological constructs, lending institutions can easily evaluate the credit worthiness of those borrowers, who do not have any financial and credit history. This will enhance the capability of financial institutions to evaluate opaque SME borrowers. Originality/value There are very few numbers of studies which have considered predicting the credit default using certain psychological variables, but with respect to Asian market, and especially India, there does not exist a single significant study which has tried to fulfil such research gap. Also, this is the first study that has explored whether certain psychological factors can predict the wilful default of the borrowers. This is one of the most significant contributions of this research.

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“…There are several other factors such as Attitude towards Debt (Zakaria et al , 2017; Norvilitis and Mao, 2013; Pattarin and Cosmo, 2012; Watson, 1998; Livingstone and Lunt, 1992), Greed (Seuntjens et al , 2016), Time Preference for money (Webley and Nyhus, 2001) and Social Stigma (Chin et al , 2018; Lopes, 2008; Athreya, 2004; Gross and Souleles, 2002), Self-esteem (Goel and Rastogi, 2021) which previous researchers have addressed. Although these factors have not been appropriately elaborated, they significantly predict a borrower's debt-related behaviour.…”

Section: Description and Classification Of Behavioural And Psychologi...mentioning

confidence: 99%

Understanding the impact of borrowers' behavioural and psychological traits on credit default: review and conceptual model

Goel

Rastogi

2021

RBF

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PurposeThe purpose of the study is to identify certain behavioural and psychological traits of the borrowers which have the tendency to predict the credit risk of the borrowers. And the second objective is to draw a conceptual model that reveals the impact of those traits on credit default.Design/methodology/approachThe study has adopted a systematic Literature Review approach to identify those behavioural and psychological traits of borrowers that reflect on the tendency to predict the credit default of borrowers.FindingsThe findings of this study have revealed that there are some non-financial factors, which can be looked into while granting a loan to a borrower. The identified factors can be used to develop a subjective credit scoring model that can quantify and verify the soft information (character and reliability) of debtors. Further, a behavioural credit scoring model will help in easing the assessment of those borrowers, who do not have an appropriate credit history and reliable financial statements.Practical implicationsThe proposed model would help banks and financial institutions to evaluate those borrowers who lack substantial financial information. Further, a subjective credit scoring model would help to evaluate the credit worthiness of such borrowers who do not have any credit history. The model would also reduce the biasness of subjective scoring and would reduce the financial constraints of borrowers.Originality/valueBy reviewing the literature, it has been observed that there are very few studies that have exclusively considered the behavioural and psychological factors in credit scoring. Several studies have linked the psychological constructs with debts, but very few researchers have considered it while constructing a behavioural scoring model. Thus, it can be inferred that this area of behavioural finance is still unexplored and needs attention of researchers worldwide. In addition, most of the studies are carried out in European, African and American regions but are almost non-existent in the Asian markets.

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Consumer Bankruptcy Stigma: Understanding Relationships with Familiarity and Perceived Control

Cited by 12 publications

References 43 publications

Helping Those That Hide: Anticipated Stigmatization Drives Concealment and a Destructive Cycle of Debt

Helping Those That Hide: Anticipated Stigmatization Drives Concealment and a Destructive Cycle of Debt

Credit scoring of small and medium enterprises: a behavioural approach

Understanding the impact of borrowers' behavioural and psychological traits on credit default: review and conceptual model

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