The Experience of Financial Hardship in Australia: Causes, Impacts and Coping Strategies

Bourova, Evgenia; Ramsay, Ian; Ali, Paul

doi:10.1007/s10603-018-9392-1

Cited by 13 publications

(21 citation statements)

References 18 publications

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“…As there is no consensus regarding the definition of over-indebtedness in the literature (Kempson 2002;Bridges and Disney 2004;Kempson et al 2004;Bańkowska et al 2015;D'Alessio and Iezzi 2016;Bourova et al 2019), likewise there is no consensus on how to measure it (Table 1). This is in good agreement with Betti et al (2007) who claim that the measurement of over-indebtedness to a large extent is based on a wide range of ad hoc statistical indicators calculated using public and private data sets.…”

Section: Definition and Measurement Of Over-indebtednessmentioning

confidence: 99%

Over-indebted Households in Poland: Classification Tree Analysis

Wałęga

2020

Soc Indic Res

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Increasing a personal debt burden implies greater financial vulnerability and threats for macroeconomic stability. It also generates a risk of the households over-indebtedness. The assessment of over-indebtedness is conducted with the use of various objective and subjective measures based on the micro-level data. The aim of the study is to investigate over-indebted households in Poland using a unique dataset obtained from the CATI survey. We discuss and compare the usefulness of various over-indebtedness measures across different socio-economic characteristics. Due to the differences in over-indebtedness across single measures, we perform a more complex assessment using a mix of indicators. As an alternative to other commonly criticised over-indebtedness measures, we apply the “below the poverty line” (BPL) measure. In order to obtain the profile of over-indebted households, we use classification and regression tree analysis as an alternative to logit or probit models. We find that DSTI (“debt service to income”) ratio underestimates the extent of over-indebtedness in vulnerable groups of households in comparison with the BPL. We highlight the necessity to use different measures depending on the adopted definition of over-indebtedness. A psychological burden of debts is particularly strong among older and poorly educated respondents. We also find that the age structure of over-indebted households in Poland differs from this structure in countries with a broader access to consumer credits. Our results can be used to enrich the methods of assessing the household over-indebtedness.

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Section: Definition and Measurement Of Over-indebtednessmentioning

confidence: 99%

Over-indebted Households in Poland: Classification Tree Analysis

Wałęga

2020

Soc Indic Res

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“…Non‐profit services assist with consumption smoothing and financial shock mitigation, but their capacity to address the deeper determinants of poverty, such as inadequate welfare payments and high costs of daily living, especially for those who are poorest, is limited. To provide the meaningful protection needed for vulnerable consumers at very high risk of financial hardship, our findings support calls for immediate increases to Centrelink payment rates, additional funding for non‐profit microfinance schemes, specifically, no/low‐interest loans so that these may be universally accessible in ways that do not exacerbate financial stress (Ali et al ., 2017; Saunders & Bedford, 2018; Bourova et al ., 2019; Commonwealth of Australia, 2019). Indeed, the findings echo the recent calls for a reliable social safety net and policy disruption (Committee for Economic Development of Australia (CEDA), 2019) rather than the status quo of incremental change.…”

Section: Resultsmentioning

confidence: 99%

“…In summary, participants described the role of the financial counselling service as assisting them to resolve immediate financial crises, make payments of arrears, access Centrelink and other entitlements, budget and reduce their debt and improve their confidence in their own financial skills. These findings align with previous descriptions of the role of financial counsellors (Steen & MacKenzie, 2013; Bourova et al ., 2019). Many participants felt confident in their own financial skills and, despite using financial counsellors, still needed ongoing support as a direct consequence of an income inadequate to meet the cost of living.…”

Section: Discussionmentioning

confidence: 99%

“I'd be sleeping in the park, I reckon”: Lived Experience of Using Financial Counselling Services in South Australia*

Pollard

Booth

Louth

et al. 2020

J of App Econs and Policy

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The need for non-profit financial services increases with economic hardship. Consumers' experience of accessing non-profit financial counselling services in South Australia was explored across five focus groups. Thirty-six participants discussed service efficiency and potential improvements. The qualitative analysis we completed revealed five themes. Regarding non-profit financial services: (i) Financial counsellors are life changers; (ii) Microfinance is "critical for survival"; and (iii) They're "hidden". For-profit products are (iv) Fast & easy "at a cost"; and there is (v) Frustration with broader system failures. Non-profit financial services assisted with consumption smoothing and emotional support, but without adequate income financial well-being was not established. Consumers rely on for-profit products in crisis situations. Findings support policy to build financial resilience and increase income.

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“…In this review, we found only three studies that investigated the socioeconomic status in detailed (Bauchet & Evans, 2019;Bourova et al, 2019;Fisher, 2019). Income level, which indicates the earning capacity of an individual, is an important indicator that should be used to measure socioeconomic status.…”

Section: Socioeconomic Status Indicatorsmentioning

confidence: 99%

“…Income level, which indicates the earning capacity of an individual, is an important indicator that should be used to measure socioeconomic status. According to studies in Australia (Bourova et al, 2019) and in the U.S.A. (Burtch & Chan, 2019), the likelihood of personal bankruptcy was higher in people from lower social classes because they have limited financial savings than those from upper social classes. Additionally, individuals with less income depend heavily on financial support and often have more debt commitments than higher income individuals (Burtch & Chan, 2019).…”

Section: Socioeconomic Status Indicatorsmentioning

confidence: 99%

Towards Achieving Long-Term Debt Sustainability: A Systematic Review of the Key Determinants of Personal Bankruptcy

Et.al¹

2021

TURCOMAT

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Purpose: This systematic review aimed to assess previous research about financial and non-financial causes of personal bankruptcy among individual households. Additionally, the paper aimed to provide an insight into the key determinants of personal bankruptcy and to determine their relationship with individual characteristics. The fundamental causes of bankruptcy and its effects on financial status were also discussed. Through understanding the causes of bankruptcy, we hope to help financial institutions to minimise the number of personal bankruptcies. Design/methodology/approach: A comprehensive systematic search was conducted to identify articles on determinants of personal bankruptcy. The selected articles were then analysed using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) protocol. Findings: We identified several themes that emerged as the key determinants of personal bankruptcy filings. These determinants were demographic indicators, socioeconomic status indicators, debt indicators, financial indicators, social stigma indicators, behavioural indicators, and macroeconomic indicators. Research implications: The key determinants of personal bankruptcy that were identified in this systematic review are renowned factors in the personal bankruptcy literature. Therefore, these determinants should be studied extensively to examine their effects in other studies and using a different type of datasets. Practical implications: The findings of this study help the financial institutions to predict the likelihood of consumer default by developing an effective credit scoring model. Additionally, the development of an effective credit scoring model could serve as an early warning indicator to identify “high risk” client. Originality/value: Bankruptcy is a long-term process that does not occur instantly. Therefore, a longitudinal and comprehensive approach is required to understand bankruptcy. Our findings contribute to the current literature by providing a better understanding of the causes of personal bankruptcy. We recommend developing an effective credit scoring model to predict the likelihood of personal bankruptcy.

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The Experience of Financial Hardship in Australia: Causes, Impacts and Coping Strategies

Cited by 13 publications

References 18 publications

Over-indebted Households in Poland: Classification Tree Analysis

Over-indebted Households in Poland: Classification Tree Analysis

“I'd be sleeping in the park, I reckon”: Lived Experience of Using Financial Counselling Services in South Australia*

Towards Achieving Long-Term Debt Sustainability: A Systematic Review of the Key Determinants of Personal Bankruptcy

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