Household Repayment Behavior: The Role of Social Capital, Institutional, Political, and Religious Beliefs
Deutsche Bundesbank - Economic Research Centre; University of Leicester; Center for Financial Studies (CFS)
Goethe University Frankfurt - Chair of Banking and Finance; Goethe University Frankfurt - Faculty of Economics and Business Administration
May 4, 2012
We examine the influence of social capital and various prevailing beliefs on household repayment behavior in Europe, after accounting for household-specific characteristics and country differences in institutions. Arrears are more common among households living in regions with dense corruption beliefs, low confidence in institutions and authorities, and a low fraction of religious people. Moreover, high stocks of social capital reduce the likelihood of arrears, net of the influence of various potentially relevant factors. Households in these communities face a higher hazard of losing standing in the group and access to the positive externalities of social capital.
Number of Pages in PDF File: 39
Keywords: Social Capital, Trust, Corruption, Beliefs, Household Arrears
JEL Classification: D12, G2, K42
Date posted: March 24, 2010 ; Last revised: May 5, 2012
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