The impact of unsecured debt on financial distress among British households

This paper uses evidence from the British Household Panel Survey (BHPS) to examine how attitudes towards unsecured debt are related to household finances and other characteristics. An ordered logit model is estimated for 1995 and 2000 using a self reported indicator of financial distress as the dependent variable. This analysis suggests that the main factors causing debt problems are the unsecured debt income ratio, the level of mortgage income gearing, the level of financial wealth of households, their health, ethnicity and marital status. While the proportion of households reporting debt problems did not change between 1995 and 2000, there were important shifts among different groups. In particular, more households in the youngest age group reported debt repayments were a heavy burden in 2000, while the opposite applies to the oldest age group where a smaller proportion of households than in 1995 reported debt was a heavy burden. These changes can largely be accounted for by the changing economic circumstances of these groups rather than an unrelated shift in attitudes. In particular, the increase in indebtedness of the young was the main factor accounting for their greater tendency to report debt problems

Box 2. Some determinants of the growth differential between the euro area and the United States since the onset of the pandemic

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The determinants of unsecured borrowing : evidence from the Bristish household panel survey

Household indebtedness has risen sharply in recent years, with large increases in both secured and unsecured borrowing. In this paper, waves 5 and 10 of the British Household Panel Survey (BHPS) for 1995 and 2000 are used to examine the determinants of participation in the unsecured debt market and the amount borrowed. Probit models for participation are estimated and age, income, positive financial prospects and housing tenure are found to be very significant and have the expected sign according to a life-cycle model for consumption. Regressions to explain the level of borrowing by individuals suggest that income is the main variable explaining cross-sectional differences in unsecured debts. The increase in aggregate unsecured debt between 1995 and 2000 does not seem to be closely linked to changes in the determinants of debt market participation and has been mainly associated with the larger amounts borrowed by those with debts. Increases in income, better educational qualifications and improved prospects regarding the financial situation contributed to this result. The major part of the overall increase in unsecured debt is not explained by variables at the individual level, but is accounted for by common, unmodelled macroeconomic factors.[resumen de autor

El endeudamiento de los hogares españoles : evolución y factores explicativos

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El endeudamiento de los hogares españoles

En este trabajo se estudia la evolución reciente del endeudamiento de los hogares españoles. Para ello se realiza, en primer lugar, un análisis descriptivo de la situación patrimonial de las familias españolas que incluye una comparación internacional y una estimación de la carga financiera asociada a la deuda. Además, se estima un modelo de corrección del error (uniecuacional) que permite identificar los principales factores explicativos del crecimiento del endeudamiento. De acuerdo con los resultados, una parte importante de dicho crecimiento tiene carácter estructural, en la medida en que su evolución es coherente con el crecimiento de la renta, del empleo y con la mayor estabilidad macroeconómica y menor coste de la financiación asociados a la participación de España en la UEM. Asimismo, la revalorización experimentada por la riqueza inmobiliaria de las familias ha desempeñado un papel relevante en la evolución reciente de sus pasivos. No obstante, los niveles de deuda más elevados suponen una mayor exposición de los hogares españoles ante posibles shocks adversos, que podría ser relativamente más acusada en algunos grupos de población concreto

El endeudamiento de los hogares españoles : una comparacion internacional

Artículo de revistaEn el articulo se describen las principales diferencias y similitudes en el nivel y en la composicion de la deuda de las familias en España y en otros paises industrializados de nuestro entorno. Se analiza, despues, el desarrollo del endeudamiento de este sector en estos mismos paises durante el periodo 1997-2001, destacando los factores que han podido ser mas relevantes en su proceso de expansion. En comparacion con otros paises de nuestro entorno el nivel de endeudamiento de las familias españolas es mas reducido que en Estados Unidos o Reino Unido y esta en linea con el de la media de la UEM, con diferencias significativas entre paises. (ad

Time aggregation and the Hodrick-Prescott filter

En este trabajo se analizan las propiedades de agregacion del filtro Hodrick- Prescott (HP), utilizado en la descomposicion de series temporales en tendencia y ciclo, para observaciones anuales, trimestrales y mensuales. La agregacion de los componentes obtenidos con la serie desagregada no se pude interpretar (de forma exacta) como el resultado de aplicar directamente un filtro HP a la serie agregada (y viceversa). No obstante, utilizando varios criterios se encuentran descomposiciones del tipo HP que proporcionan resultados muy similares. Finalmente, el criterio propuesto para encontrar filtros HP 'casi equivalentes' para distintas frecuencias de observacion es de facil aplicacion, y no depende de la serie temporal objeto de analisis, ni del modelo de esta. (am) (ad

Temporal aggregation, systematic sampling, and the Hodrick-Prescott filter

Maravall and del Río (2001), analized the time aggregation properties of the Hodrick-Prescott (HP) filter, which decomposes a time series into trend and cycle, for the case of annual, quarterly, and monthly data, and showed that aggregation of the disaggregate component cannot be obtained as the exact result from direct application of an HP filter to the aggregate series. The present paper shows how, using several criteria, one can find HP decompositions for different levels of aggregation that provide similar results. We use as the main criterion for aggregation the preservation of the period associated with the frequency for which the filter gain is ½this criterion is intuitive and easy to apply. It is shown that the Ravn and Uhlig (2002) empirical rule turns out to be a first-order approximation to our criterion, and that alternative —more complex— criteria yield similar results. Moreover, the values of the parameter λ of the HP filter, that provide results that are approximately consistent under aggregation, are considerably robust with respect to the ARIMA model of the series. Aggregation is seen to work better for the case of temporal aggregation than for systematic sampling. Still a word of caution is made concerning the desirability of exact aggregation consistency. The paper concludes with a clarification having to do with the questionable spuriousness of the cycles obtained with HP filte

The uneven impact of the health crisis on the euro area economies in 2020

El impacto económico de la pandemia de COVID-19 ha sido desigual en los países de la zona del euro. Entre los factores que lo explican, estarían la intensidad de la crisis sanitaria en cada territorio y la severidad y la duración de las medidas de contención aplicadas para limitar la propagación del virus, así como las diferencias estructurales de las economías, y singularmente su especialización productiva. El análisis empírico presentado en este trabajo indica que la importancia relativa de las ramas de servicios más vulnerables —al conllevar una mayor interacción social— y la capacidad para implantar teletrabajo explican en buena parte el impacto económico diferencial de la pandemia entre los países de la zona del euro.The economic impact of the COVID-19 pandemic has been uneven across euro área countries. Among the factors explaining this are the intensity of the health crisis in each territory and the severity and duration of the containment measures applied to limit the spread of the virus, as well as the structural differences between the economies, and, in particular, their productive specialisation. The empirical analysis presented in this paper indicates that the variation of the economic impact of the pandemic across euro área countries is largely explained by the relative importance of the most vulnerable service industries – those involving greater face-to-face social interaction – and the capacity to implement teleworking