Negative Net Worth and the Life Cycle Hypothesis

17 Pages Posted: 24 Jul 2012 Last revised: 18 Nov 2012

See all articles by Travis Mountain

Travis Mountain

Consumer Sciences Department

Sherman D. Hanna

Ohio State University (OSU)

Date Written: July 24, 2012

Abstract

Life cycle theory is applied to determine which households are more likely to have negative net worth. Negative net worth household characteristics are examined using data from the 1992, 1995, 1998, 2001, 2004, and 2007 Survey of Consumer Finances. Logit Analysis showed households in survey years 1995 and 2001 are less likely to have negative worth compared to the most recent 2007 survey while young, educated households are also more likely to have negative net worth.

Keywords: Life cycle hypothesis, net worth, Survey of Consumer Finances

JEL Classification: D12, D14, D91, E21

Suggested Citation

Mountain, Travis and Hanna, Sherman D., Negative Net Worth and the Life Cycle Hypothesis (July 24, 2012). Available at SSRN: https://ssrn.com/abstract=2116323 or http://dx.doi.org/10.2139/ssrn.2116323

Travis Mountain

Consumer Sciences Department ( email )

1787 Neil Avenue
Columbus, OH 43210
United States

Sherman D. Hanna (Contact Author)

Ohio State University (OSU) ( email )

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

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