Household Over-Indebtedness: Definition and Measurement with Italian Data

D’Alessio, Giovanni; Iezzi, Stefano

doi:10.2139/ssrn.2243578

Cited by 48 publications

(58 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Researchers in South Africa have attempted to understand the link between debt and poverty by studying household over-indebtedness in view of income levels, which by implication reflects poverty status only from a money-metric perspective (Collins, 2008;Hurwitz & Luiz, 2007). Following a similar approach, Pressman andScott (2009), andIezzi (2013) investigated the link between debt and poverty for the US and Italy respectively.…”

Section: Gap In the Literaturementioning

confidence: 99%

“…a rise in interest rates) or changes in family structure (e.g. divorce or birth or death of a family member) (D'Alessio & Iezzi, 2013). Accordingly, the only way to meet debt repayment commitments in this particular case entails a substantial lowering of consumption levels in order to absorb the shocks and consequences pertaining to overindebtedness.…”

Section: Theoretical Framework Underpinning Debt Usementioning

confidence: 99%

“…Most commonly, studies on debt-poverty nexus have found a close link between overindebtedness and low income (Kempson, 2002;Davydoff et al, 2008;Bryan et al, 2010;D'Alessio & Iezzi, 2013). Using the subjective measure of poverty, Graham (2008), and Howell and Howell (2008) found that high debt can have a stronger impact on subjective well-being than low income.…”

Section: Debt-poverty Nexusmentioning

confidence: 99%

“…Overindebtedness can be caused by, and contribute to, poverty. Poverty compels households that do not have enough resources to accumulate debt with no repayment plan (Russell, Maitre, & Donnelly, 2011;D'Alessio & Iezzi, 2013). On the other hand, over-indebtedness can also be a cause of poverty and deprivation because households are left with less disposable income to meet basic needs as a result of debt service.…”

Section: Introductionmentioning

confidence: 99%

“…Evidence shows that over-indebtedness can adversely affect standards of living and household well-being, as servicing debt reduces disposable income (Civic Consulting of the Consumer Policy Evaluation Consortium, 2008). The relationship between debt and poverty is embedded in one of the measures of overindebtedness, where a household is over-indebted if debt service payments force the household below the poverty line (Russell, Maitre & Donnelly, 2011;D'Alessio & Iezzi, 2013;Ntsalaze & Ikhide, 2016a). On a macro level, Loko, Mlachila, Nallari and Kalonji (2003) carried out a crosscountry study on the impact of debt on poverty in low-income countries, and confirmed that a high level of external debt contributes to poverty through its impact on economic growth.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

The threshold effects of household indebtedness on multidimensional poverty

Ntsalaze

Ikhide

2017

IJSE

View full text Add to dashboard Cite

DeclarationBy submitting this dissertation electronically, I declare that the entirety of the work contained therein is my own, original work, that I am the sole author thereof (save to the extent explicitly otherwise stated), that reproduction and publication thereof by Stellenbosch University will not infringe any third party rights and that I have not previously in its entirety or in part submitted it for obtaining any qualification.This dissertation includes two published and one accepted but not yet published original papers in peer-reviewed international journals. The fourth paper representing chapter eight is ready for submission for peer review. The development and writing of the papers (published and unpublished) were the principal responsibility of myself and, for each of the cases where this is not the case, a declaration is included in the dissertation indicating the nature and extent of the contributions of co-authors. AbstractGlobal household indebtedness has reached unprecedented levels over the past few decades.The household sector has had to cope with significant losses in income and wealth as well as the burden of debt service since the beginning of the financial crisis. Research focus on this phenomenon, together with its social implications, has grown. This study uses the National Income Dynamics Study (NIDS) data to empirically investigate the effects of household debt on multidimensional poverty. This was achieved through four independent research papers meant to address different angles of the subject. Chapter 5 provides a snapshot of the prevalence of over-indebtedness, using various international indicators and the National Credit Regulator (NCR) indicator, and describes which households are over-indebted. A total of eight percent of South African households are overindebted, and 61.4 percent of those households are found in the lowest income category (R0 -R2 000), spending more than 45 percent of their household income on debt repayments, which is beyond levels that are considered sustainable. The alarming revelation is that, according to the unsecured debt indicator, 15.2 percent of households are over-indebted, while 11 percent of households are driven below the relative income poverty line after making debt repayments. Stellenbosch University https://scholar.sun.ac.za 3The racial distribution indicates that households headed by Africans are overrepresented (79%).Most over-indebted households are found amongst those who own their places of residence (78.6%), do not receive government grants (71.7%), are male (53.8%), and have an unemployed household head (53.5%).Chapter 6 examines the presence of thresholds in the debt-poverty nexus at micro level, i.e. the tipping point above which debt is associated with more multidimensional poverty. By applying the Generalised Additive Model (GAM) using regression splines, the study finds the existence of critical tipping points between household debt service-to-income ratio and multidimensional poverty along with other explanatory variables (age...

show abstract

Section: Gap In the Literaturementioning

confidence: 99%

Section: Theoretical Framework Underpinning Debt Usementioning

confidence: 99%

Section: Debt-poverty Nexusmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

The threshold effects of household indebtedness on multidimensional poverty

Ntsalaze

Ikhide

2017

IJSE

View full text Add to dashboard Cite

show abstract

The impact of savings and credit on health and health behaviours: an outcome-wide longitudinal approach

Białowolski

Węziak‐Białowolska

VanderWeele

2019

Int J Public Health

View full text Add to dashboard Cite

Objectives This study evaluated decisions related to debt and savings on physical health, emotional health and health behaviours. Methods The longitudinal data from the Polish biennial household panel-Social Diagnosis Survey-were used. Evidence for a link between credit/savings and health/health behaviours was presented using three waves of the data and an outcomewide regression analysis. To circumvent endogeneity, variables temporally prior to exposure were used as controls. Sensitivity analysis for unmeasured confounding, conducted using E-values, provided a check for robustness. Results Debt proved a significant stressor, affecting three of five physical health measures. Over-indebted individuals suffered even more in terms of physical health outcomes. The role of savings in physical health was much less significant, yet had significant bearing on measures of emotional health. In terms of emotional health, debt (over-indebtedness in particular) influenced loneliness and increased suicidal thoughts. With respect to health behaviours, savings appeared significant in reducing smoking and increasing uptake of sport activities, while debt had no significant effect in these areas. Conclusions Recommendations are formulated to foster saving activity and develop institutional solutions for overindebtedness.

show abstract