Household debt and social interactions
Dimitris Georgarakos,
Michael Haliassos and
Giacomo Pasini
No 2012/05, CFS Working Paper Series from Center for Financial Studies (CFS)
Abstract:
Debt-induced crises, including the subprime, are usually attributed exclusively to supply-side factors. We examine the role of social influences on debt culture, emanating from perceived average income of peers. Utilizing unique information from a household survey representative of the Dutch population, that circumvents the issue of defining the social circle, we consider collateralized, consumer, and informal loans. We find robust social effects on borrowing, especially among those who consider themselves poorer than their peers; and on indebtedness, suggesting a link to financial distress. We employ a number of approaches to rule out spurious associations and to handle correlated effects.
Keywords: Household Finance; Household Debt; Social Interactions; Mortgages; Consumer Credit; Informal Loans (search for similar items in EconPapers)
JEL-codes: E21 G11 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)
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https://www.econstor.eu/bitstream/10419/71144/1/715799533.pdf (application/pdf)
Related works:
Journal Article: Household Debt and Social Interactions (2014) 
Working Paper: Household debt and social interactions (2013) 
Working Paper: Household Debt and Social Interactions (2012) 
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:201205
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