Household Repayment Behavior: The Role of Social Capital and Institutional, Political, and Religious Beliefs
39 Pages Posted: 24 Mar 2010 Last revised: 19 May 2015
Date Written: 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.
Keywords: Social Capital, Trust, Corruption, Beliefs, Household Arrears
JEL Classification: D12, G2, K42
Suggested Citation: Suggested Citation