 Household debt and debt to income: The role of business ownershipJosé Ignacio Rivero Wildemauwe and Graciela Sanroman The Quarterly Review of Economics and Finance, 2022, vol. 83, issue C, 52-68 Abstract: This paper studies private business ownership as a source of heterogeneity of households’ indebtedness. We analyse micro-data on the debt side of household balance sheets in a small economy, with an underdeveloped financial system. We find that households’ behaviour in the credit markets varies substantially between employees and entrepreneurs; and that separately considering formal and informal business ownership is first-order. Our results indicate that the probability of being indebted is higher for employees. We also show that debt to income elasticity differs markedly across types of households, with employees (informal business owners) being the most (least) sensitive to income variations. Finally, we go beyond the mean, and find important differences between average elasticities and those at different quantiles of debt for formal entrepreneurs, while no divergences are detected for employees or informal business owners. Keywords: Household finance; Household debt; Debt to income elasticities (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:83:y:2022:i:c:p:52-68 DOI: 10.1016/j.qref.2021.11.001 Access Statistics for this article The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty More articles in The Quarterly Review of Economics and Finance from Elsevier |
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