Consumer Debt Delinquency by Family Lifecycle Categories

Xiao, J. J., Yao, R.(2014). Consumer debt delinquency by family lifecycle categories. International Journal of Bank Marketing, 32(1), 43-59.

31 Pages Posted: 3 Mar 2016

See all articles by Jing Jian Xiao

Jing Jian Xiao

University of Rhode Island

Rui Yao

University of Missouri at Columbia - Department of Personal Finance Planning

Date Written: 2014

Abstract

Purpose – The purpose of this paper is to document debt delinquency patterns by family lifecycle categories using multiple data sets that are nationally representative of American families.

Design/methodology/approach – Based on previous research, 15 lifecycle categories appropriate for American families are defined by household head’s age, marital status, presence of children, and age of children. Data used are from Surveys of Consumer Finances (SCF) in the USA in 1992-2010. Multiple logistic regressions are conducted to identify probabilities of debt delinquencies of families in various lifecycle categories by controlling for income, financial assets, holdings of several types of debt, and several other demographic and socioeconomic variables.

Findings – The results show that among the 15 household lifecycle categories, the top three most likely to be delinquent are young couples with children aged seven or older, middle-aged singles with children aged 15 or older, and middle-aged singles with children under 15. Younger households are more financially distressed than their older counterparts. Presence of children increases the probability of debt delinquency.

Research limitations/implications – In this study, multiple national data sets representing American families are used to document debt delinquency patterns by family lifecycle categories. Results shed light on this important topic and offer helpful information for both banking industry practitioners and consumer financial educators.

Practical implications – The information produced by this study can help bank managers better identify their potential clients and understand their current customers. Different marketing strategies based on the research findings can be developed to attract and retain customers with different delinquency risks.

Originality/value – This is the first study to examine debt delinquencies by family lifecycle categories with multiple SCF data sets in the USA. The 15 family lifecycle categories used are based on recent research that is specially designed for American families. The research findings provide straightforward implications for both bank managers and consumer educators.

Keywords: Consumer behavior, Borrowing, Debt delinquency, Family lifecycle, Consumer credit, Survey of consumer finances

Suggested Citation

Xiao, Jing Jian and Yao, Rui, Consumer Debt Delinquency by Family Lifecycle Categories (2014). Xiao, J. J., Yao, R.(2014). Consumer debt delinquency by family lifecycle categories. International Journal of Bank Marketing, 32(1), 43-59., Available at SSRN: https://ssrn.com/abstract=2740046

Jing Jian Xiao (Contact Author)

University of Rhode Island ( email )

Transition Center
Kingston, RI 02881
United States
401-874-2547 (Phone)
401-874-4020 (Fax)

HOME PAGE: http://www.uri.edu/hss/hdf/faculty/JingJXiao.htm

Rui Yao

University of Missouri at Columbia - Department of Personal Finance Planning ( email )

239 Stanley Hall
Columbia, MO 65211-7700
United States
573-882-9343 (Phone)
573-884-8389 (Fax)

HOME PAGE: http://pfp.missouri.edu/faculty_yao.html

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