Negative Net Worth and the Life Cycle Hypothesis
17 Pages Posted: 24 Jul 2012 Last revised: 18 Nov 2012
Date Written: July 24, 2012
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: Suggested Citation