Is Financial Fragility a Matter of Illiquidity? An Appraisal for Italian Households

23 Pages Posted: 19 Jul 2012

See all articles by Marianna Brunetti

Marianna Brunetti

Dept. Economics and Finance, University of Rome Tor Vergata; CEFIN

Elena Giarda

Dipartimento di Analisi e Ricerca Economica, Prometeia; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN); Fondazione Rodolfo Debenedetti

Costanza Torricelli

University of Modena and Reggio Emilia - Department of Economics; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN); Center for Research on Pensions and Welfare Policies (CeRP)

Multiple version iconThere are 3 versions of this paper

Date Written: July 18, 2012

Abstract

In this paper we investigate household financial fragility and assess the role played by the composition of the household portfolio besides standard determinants of this condition (e.g. income, indebtedness, age, gender, financial literacy). We take the case of Italy, given the very peculiar portfolio composition (high level of housing and low level of indebtedness and portfolio diversification) and provide two main contributions. First, we propose a novel definition of financial fragility. Second, based on this new measure, we use data from the 1998-2010 Bank of Italy Survey on Household Income and Wealth to investigate the determinants of this condition. Our results confirm most usual markers of financial fragility and additionally highlight the role of homeownership, which is not related to the presence of mortgages but it is rather connected to specific socio-demographic features such as age and marital status.

Keywords: financial fragility, household portfolios, housing

JEL Classification: D14, G11, C25

Suggested Citation

Brunetti, Marianna and Giarda, Elena and Torricelli, Costanza, Is Financial Fragility a Matter of Illiquidity? An Appraisal for Italian Households (July 18, 2012). CEIS Working Paper No. 242. Available at SSRN: https://ssrn.com/abstract=2112035 or http://dx.doi.org/10.2139/ssrn.2112035

Marianna Brunetti (Contact Author)

Dept. Economics and Finance, University of Rome Tor Vergata ( email )

Via Columbia, 2
Rome, Lazio 00133
Italy

HOME PAGE: http://economia.uniroma2.it/en/def/faculty/178/brunetti-marianna

CEFIN ( email )

via Berengario 51
Modena, modena I-41100
Italy

Elena Giarda

Dipartimento di Analisi e Ricerca Economica, Prometeia ( email )

Via G. Marconi 43
Bologna, 40122
Italy
+390516480911 (Phone)
+39051220753 (Fax)

HOME PAGE: http://https://www.prometeia.it/en/research-insights

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN) ( email )

via Berengario 51
Modena, modena I-41100
Italy

Fondazione Rodolfo Debenedetti ( email )

Via Roentgen 1,
Room 5.C1-11
Milan, Milano 20136
Italy

Costanza Torricelli

University of Modena and Reggio Emilia - Department of Economics ( email )

Viale Berengario 51
41100 Modena, Modena 41100
Italy
+390592056733 (Phone)
+390592056937 (Fax)

HOME PAGE: http://www.economia.unimore.it/torricelli_costanza/index.htm

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN) ( email )

via Berengario 51
Modena, modena I-41100
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

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