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

Agricultural and Applied Economics; Agricultural and Applied Economics; Agricultural and Applied Economics

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

Agricultural and Applied Economics ( email )

2025 Woodland Hills Dr.
Blacksburg, VA 24061
United States
2406 (Fax)

Agricultural and Applied Economics ( email )

206B Hutcheson Hall
Blacksburg, VA 24060
United States

Agricultural and Applied Economics ( email )

Blacksburg, VA 24061
United States
24060 (Fax)

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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