Debt and Financial Expectations: An Individual- and Household-Level Analysis
Sarah Brown (),
Karl Taylor and
Stephen Wheatley Price
Economic Inquiry, 2005, vol. 43, issue 1, 100-120
In this article we show that optimistic financial expectations impact positively on both the quantity of debt and the growth in debt at the individual and household levels. Our theoretical model shows that this association is predicted under a variety of plausible scenarios. In the empirical analysis we explore the determinants of debt and of growth in debt using British data. We find convincing support for our theoretical priors and show that it is optimistic financial expectations per se that are important in influencing debt, rather than the accuracy of individuals' predictions regarding their future financial situation. (JEL D18, D84, D91) Copyright 2005, Oxford University Press.
JEL-codes: D18 D84 D91 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (46) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Debt and financial expectations: an individual and household level analysis (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:ecinqu:v:43:y:2005:i:1:p:100-120
Ordering information: This journal article can be ordered from
Access Statistics for this article
Economic Inquiry is currently edited by Preston McAfee
More articles in Economic Inquiry from Western Economic Association International Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().