Trying Times: Expected Financial Distress in the Household Context
13 Pages Posted: 25 Apr 2023
Date Written: April 15, 2023
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: Suggested Citation