 Indicators of financial vulnerability: a household level studyValentina Michelangeli and
Cristiana Rampazzi (cristiana.@bancaditalia.it)
No 369, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Abstract: This paper compares two indicators of household vulnerability using the Bank of Italy�s Survey on Household Income and Wealth (2008-2014). According to the first indicator, a household is considered vulnerable if its debt service-to-income ratio exceeds 30 per cent and its income is below the median of the population. According to the second, a household is defined vulnerable if the sum of its income and liquid financial assets is not sufficient to cover debt payments and basic living costs for four months. While providing similar information on the proportion of households deemed vulnerable, the two indicators capture different aspects of the sector�s financial fragility: vulnerable households according to the first indicator have, on average, higher income, liquid assets and debt than those identified by the second indicator. Moreover, while the first indicator shows a lower correlation with payment arrears, its simplicity, timeliness and less arbitrary components make it better suited for cross-country comparisons. Keywords: household vulnerability; debt service; financial margin (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:bdi:opques:qef_369_16 Access Statistics for this paper More papers in Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC. |
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