The increasing financial obligations burden of US households: who is affected?
Article first published online: 21 AUG 2012
International Journal of Consumer Studies © 2012 Blackwell Publishing Ltd
International Journal of Consumer Studies
Volume 36, Issue 5, pages 588–594, September 2012
How to Cite
Hanna, S. D., Yuh, Y. and Chatterjee, S. (2012), The increasing financial obligations burden of US households: who is affected?. International Journal of Consumer Studies, 36: 588–594. doi: 10.1111/j.1470-6431.2012.01125.x
- Issue published online: 21 AUG 2012
- Article first published online: 21 AUG 2012
- Borrowing decisions;
- household debt;
- financial obligations;
The purpose of this paper is to examine factors associated with changes in the proportion of households with high financial obligations ratios in the United States. The proportion of households paying more than 40% of income for debt, rent, vehicle leases, property taxes and homeowners’ insurance, which we refer to as having a heavy burden, increased from 18% in 1992 to 27% in 2007. Multivariate analysis of a combination of six Survey of Consumer Finances data sets indicates that the likelihood of having a heavy burden was positively associated with homeownership, self-employment and retirement status. Those with an optimistic 5-year expectation of the economy were more likely to be in a household with a heavy burden. Education was positively related to having a heavy burden, suggesting that having a heavy burden is not simply a cognitive error.