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Credit Card Indebtedness and Psychological Well‐Being Over Time: Empirical Evidence from a Household Survey
Author(s) -
SHEN SHUYING,
SAM ABDOUL G.,
JONES EUGENE
Publication year - 2014
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/joca.12047
Subject(s) - credit card , debt , household debt , construct (python library) , empirical research , empirical evidence , index (typography) , categorization , economics , monetary economics , business , finance , statistics , computer science , mathematics , philosophy , epistemology , artificial intelligence , world wide web , payment , programming language
While a number of studies have investigated the relationship between debt and psychological well‐being, none so far has explored if and how this relationship evolves over time. We seek to fill this gap in the literature by empirically analyzing the impact of household credit card debt on debt stress. Using cross‐sectional data collected by The Ohio State University's Consumer Finance Monthly survey between August 2008 and December 2010, we construct a debt stress index and categorize households into three groups based on the length of credit card indebtedness. Our empirical results provide statistical evidence of time‐varying impacts of credit card debt on stress levels. Specifically, we find that debt stress for short‐run debtors is more than twice that of long‐run debtors. The results are robust across a range of econometric specifications.