Household Debt: the Role of Income and Business Ownership in a Small Emerging Country

José Ignacio Rivero Wildemauwe and Graciela Sanroman ()
Additional contact information
Graciela Sanroman: Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República

No 820, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: We analyze the debt side of household balance sheets in a small economy with underdeveloped financial markets. Our main focus is on the influence of income on the intensive margin of debt holdings and how business ownership affects that relationship. Using data from a novel Uruguayan dataset, we estimate selectioncorrected Conditional Quantile Regressions (CQR). The motivation for using CQR stems from the fact that the conditional distribution of debt holdings is highly asymmetric. This makes it worthwhile to take the analysis beyond the mean. In addition, understanding the effects of income and entrepreneurship for the most indebted households is a policy relevant question. We find that income does not affect the probability of being indebted but it has a significant impact on the intensive margin of debt holdings. The income elasticity of debt stocks is positive and varies substantially across types of households, being those who own formal businesses the most sensitive to income variations.

Keywords: Household finance; Household debt; Conditional Quantile Regression (search for similar items in EconPapers)
JEL-codes: C21 C24 D14 G0 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2020-11
New Economics Papers: this item is included in nep-ent and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hdl.handle.net/20.500.12008/26107 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:0820

Access Statistics for this paper

More papers in Documentos de Trabajo (working papers) from Department of Economics - dECON Contact information at EDIRC.
Bibliographic data for series maintained by Andrea Doneschi () and ().