The Increasing Financial Obligations Burden of U.S. Households: Who is Affected?

International Journal of Consumer Studies, 2012, 36, 588–594

Posted: 20 May 2012 Last revised: 25 Aug 2012

See all articles by Sherman D. Hanna

Sherman D. Hanna

Ohio State University (OSU)

Yoonkyung Yuh

Ewha Womans University

Swarn Chatterjee

University of Georgia

Date Written: May 19, 2012

Abstract

The purpose of this paper is to examine factors associated with changes in the proportion of households with high financial obligations ratios in the United States. The proportion of households paying more than 40% of income for debt, rent, vehicle leases, property taxes, and homeowners insurance, which we refer to as having a heavy burden, increased from 18% in 1992 to 27% in 2007. Multivariate analysis of a combination of six Survey of Consumer Finances datasets indicates that the likelihood of having a heavy burden was positively associated with homeownership, self-employment, and retirement status. Those with an optimistic five year expectation of the economy were more likely to be in a household with a heavy burden. Education was positively related to having a heavy burden, suggesting that having a heavy burden is not simply a cognitive error.

Keywords: Borrowing Decisions, Household Debt, Financial obligations, Education, Expectations

JEL Classification: C250, D120, G210, G330

Suggested Citation

Hanna, Sherman D. and Yuh, Yoonkyung and Chatterjee, Swarn, The Increasing Financial Obligations Burden of U.S. Households: Who is Affected? (May 19, 2012). International Journal of Consumer Studies, 2012, 36, 588–594. Available at SSRN: https://ssrn.com/abstract=2062797

Sherman D. Hanna (Contact Author)

Ohio State University (OSU) ( email )

1787 Neil Avenue
Campbell 265D
Columbus, OH 43210
United States
614-292-4584 (Phone)

Yoonkyung Yuh

Ewha Womans University ( email )

Shinsegae Building Rm 425
11-1 Daehyun-dong, Seodaemun-gu
Seoul 120-750
Korea
82-2-3277-4076 (Phone)
82-2-3277-2835 (Fax)

Swarn Chatterjee

University of Georgia ( email )

Athens, GA 30602-3622
United States

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