Abstract
The study of household debt burden is important because households are an essential element of each social and economic system. This means that any debt-service problems that they encounter will portray a negative influence on the whole economy in the long run. Further, household debt is currently becoming a very crucial social and economic problem for both highly developed countries and emerging markets (including ASEAN). This paper attempts to conduct a preliminary investigation on the determinants of household debt burden by looking first at the trend of household debt in some advanced economies and emerging ASEAN countries. It will also review some macroeconomic factors inherent in household debt burden, namely, interest rate, inflation rate, housing price index, unemployment rate, and aggregate consumer consumption. Accordingly, the aim of this paper is to produce a conceptual framework and discuss the methodology process involved. It is hoped that the evidences laid out from previous literatures on the importance of solving the household debt burden issue, in some way, have caused the curiosity for further investigation in determining, uncovering, and validating the determinant factors that may affect household debt burden in the selected countries under this study.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Nakornthab D (2010) Household indebted and its implications for financial stability. The South East Asian Central Banks (SEACEN), Kuala Lumpur
Schooley DK, Worden DD (2010) Fueling the credit crisis: who uses consumer credit and what drives debt burden? Bus Econ 45(4):266–276
Claessens S (2012) Shedding debt. Financ Dev 21:1–4
Lund S, Roxburgh C (2010) Debt and deleveraging. World Econ 11(2):1–30
Brown M, Haughwout A, Lee D, van der Klaauw W (2010) The financial crisis at the kitchen table: trends in household debt and credit. Federal Reserve Bank of New York, New York
Croxson K, Lund S, Roxburgh C (2012) Working out of debt. McKinsey Q 2012(1):96–107
Athanassiou E (2012) Household debt and domestic demand: Greece versus other euro zone economies. Int J Bus Soc Sci 3(10):157–166
Soman D, Cheema A (2002) The effect of credit on spending decisions: the role of the credit limit and credibility. Mark Sci 21(1):32–53
Debelle G (2004) Household debt and the macroeconomy. BIS Q Rev 2004:51–64
Dynan KE, Kohn DL (2007) The rise in U.S. household indebtedness: causes and consequences. Finance and Economics Discussion Series 37. FEDS, USA
OECD (2010) OECD factbook 2010: economic, environmental and social statistics. OECD, Paris, p 292
Barnes S, Young G (2003) The rise in US household debt: assessing its causes and sustainability, Working Paper Series Bank of England 206. Bank of England, London, p 38
Medas P, Reynaud J, Mahedy T, Krznar I, Rabanal P (2013) International Monetary Fund Canada country report 13/41
Turinetti E, Zhuang H (2011) Exploring determinants of U.S. household debt. J Appl Bus Res 27(6):85–91
Eunmi LEE (2012) Household debt: latent risk in Korea. SERI Quarterly 5(2)
Yao R, Sharpe DL, Gorham EE (2011) An exploratory study of Chinese Americans’ debt ownership. J Fam Econ Issues 32(4):600–611
Girouard N, Kennedy M, Andre C (2007) Has the rise in debt made households more vulnerable? Economics department working paper no. 535. OECD, Paris
Johnson KW (2007) The transactions demand for credit cards. BE J Econ Anal Policy 7(1), Article 16
Mishkin FS (1976) Illiquidity, consumer durable expenditure, and monetary policy. Am Econ Rev 66(4):642–654
McCarthy J (1997) Debt, delinquencies, and consumer spending. Curr Issues Econ Financ 3(3):1–6
Johnson K, Li G (2007) Do high debt payments hinder household consumption smoothing? FEDS, USA
Harris RDF, Tzavalis E (1999) Inference for unit roots in dynamic panels where the time dimension is fixed. J Econ 91(2):201–226
Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econ 115(1):53–74
Brooks C (2008) Introductory econometrics for finance. Cambridge University Press, Cambridge/New York, p 728
Gujarati D (2003) Basic econometrics. McGraw-Hill, New York, pp 363–369
Meng S, Hoang NT, Siriwardana M (2011) The determinants of Australian household debt: a macro- level study. Bus Econ Public Policy Work Pap 4:1–24
Acknowledgment
The researchers would like to thank the Research Management Institute (RMI), Universiti Teknologi MARA for the Research Intensive Faculty Grant in support of this paper.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer Science+Business Media Singapore
About this paper
Cite this paper
Mainal, S.A., Kassim, N.A.M., Ho, C.S.F., Yusof, J.M. (2016). Preliminary Investigation on the Determinants of Household Debt Burden. In: Pyeman, J., Wan Rashid, W., Hanif, A., Syed Mohamad, S., Tan, P. (eds) Proceedings of the 1st AAGBS International Conference on Business Management 2014 (AiCoBM 2014). Springer, Singapore. https://doi.org/10.1007/978-981-287-426-9_42
Download citation
DOI: https://doi.org/10.1007/978-981-287-426-9_42
Publisher Name: Springer, Singapore
Print ISBN: 978-981-287-425-2
Online ISBN: 978-981-287-426-9
eBook Packages: Business and ManagementBusiness and Management (R0)