The Joneses’ income and debt market participation: Empirical evidence from bank account data

Michael Berlemann () and Jan Salland

Economics Letters, 2016, vol. 142, issue C, 6-9

Abstract: In this paper we study whether the decision to raise debt is related to average income in the own residential area. Based on a unique dataset of bank account data we find that bank customers are more likely to hold collateralized and uncollateralized loans and to make use of the overdraft facility when the comparison income is higher, even after controlling for socio-demographic and financial characteristics. This indicates that conspicuous consumption is partly financed by debt.

Keywords: Household debt; Comparison income; Keeping up with the Joneses; Behavioral finance; Conspicuous consumption; Peer effects (search for similar items in EconPapers)
JEL-codes: D14 G11 R2 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:142:y:2016:i:c:p:6-9

DOI: 10.1016/j.econlet.2016.02.030

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