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The increasing financial obligations burden of US households: who is affected?
Author(s) -
Hanna Sherman D.,
Yuh Yoonkyung,
Chatterjee Swarn
Publication year - 2012
Publication title -
international journal of consumer studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.775
H-Index - 71
eISSN - 1470-6431
pISSN - 1470-6423
DOI - 10.1111/j.1470-6431.2012.01125.x
Subject(s) - debt , demographic economics , economics , multivariate analysis , business , public economics , finance , computer science , machine learning
The purpose of this paper is to examine factors associated with changes in the proportion of households with high financial obligations ratios in the U nited S tates. The proportion of households paying more than 40% of income for debt, rent, vehicle leases, property taxes and homeowners’ insurance, which we refer to as having a heavy burden, increased from 18% in 1992 to 27% in 2007. Multivariate analysis of a combination of six S urvey of C onsumer F inances data sets indicates that the likelihood of having a heavy burden was positively associated with homeownership, self‐employment and retirement status. Those with an optimistic 5‐year expectation of the economy were more likely to be in a household with a heavy burden. Education was positively related to having a heavy burden, suggesting that having a heavy burden is not simply a cognitive error.