Gauging Households' Debt Tolerance: Evidence from Thailand

Athiphat Muthitacharoen

No 12, PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: Understanding households' debt tolerance has direct implications on policies addressing high household debt in many Asian economies. This study examines the determinants of debt tolerance and assesses the tolerance level among different household segments. It defines the debt tolerance as the ability to cope with debt without suffering from anxiety and provides empirical evidence based on a survey on Thai households in 2013. Using the IV probit model, the findings indicate that factors important to the debt tolerance include not only debt burden and financial cushion but also income security, financial history, and financial discipline. This suggests that addressing the debt tolerance issue requires a multi-faceted approach. It also highlights the relatively low debt tolerance among households in precarious jobs including farmers, general workers and business owners. The results are robust to a number of alternative specifications.

Keywords: Household debt sustainability; debt tolerance; household finance (search for similar items in EconPapers)
JEL-codes: C25 D14 E21 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2015-12
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Related works:
Journal Article: Gauging Households’ Debt Tolerance: Evidence from Thailand (2016)
Journal Article: Gauging Households Debt Tolerance: Evidence from Thailand
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