 Self-Control, Financial Literacy and Consumer Over-IndebtednessDiscussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM) Abstract: This paper examines the relationship between self-control, financial literacy and over-indebtedness on consumer credit debt among UK consumer. Lack of selfcontrol and financial illiteracy are positively associated with non-payment of consumer credit and self-reported excessive financial burdens of debt. Consumers who exhibit self-control problems are shown to make greater use of quick-access but high cost credit items such as store cards and payday loans. We also find consumers with self-control problems are more likely to suffer income shocks, credit withdrawals and unforeseen expenses on durables, suggesting that lack of self-control increases exposure to a variety of risks. In most specifications we find a stronger role for lack of self-control than for financial illiteracy in explaining consumer over-indebtedness. We discuss the policy implications of these findings. Keywords: Self-control; Financial literacy; Consumer debt (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:not:notcfc:12/02 Access Statistics for this paper More papers in Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM) School of Economics University of Nottingham University Park Nottingham NG7 2RD. Contact information at EDIRC. |
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