Trying Times: Expected Financial Distress in the Household Context

13 Pages Posted: 25 Apr 2023

See all articles by Carolin Hoeltken

Carolin Hoeltken

University of Cambridge - Department of Land Economy

Date Written: April 15, 2023

Abstract

Persistent financial concerns often lead to poor mental health, which is why we need to better understand which factors contribute to it. I elicit determinants of household heads' and non-household heads' expected financial distress after the sudden energy-price hike in the UK in 2021 and find that it is primarily the former who feel the financial burden of the cost-of-living crisis. A decomposition of the gap in expected financial distress highlights that not only do household heads and non-household heads experience strain differently, but the main drivers of financial distress are time-dependent. These are important insights for researchers and policy-makers.

Keywords: Financial distress, cost-of-living crisis, household behaviour, energy prices

JEL Classification: D12, G41, G50, Q41

Suggested Citation

Hoeltken, Carolin, Trying Times: Expected Financial Distress in the Household Context (April 15, 2023). Available at SSRN: https://ssrn.com/abstract=4419730 or http://dx.doi.org/10.2139/ssrn.4419730

Carolin Hoeltken (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

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