Listing 1 - 2 of 2 |
Sort by
|
Choose an application
The quest for status is a powerful motivator, but does it affect inequality? This paper presents a novel lab experiment that was designed and conducted to identify the relationship between inequality, status signaling, debt, and conspicuous consumption. It reports three main findings: First, consumption increases when it is "conspicuous" (i.e. is both observable, and signals ability/status). Second, borrowing increases when consumption is conspicuous. More critically, this increase in loan-taking is driven by those at the bottom of the income distribution. Third, in the presence of conspicuous consumption, access to finance exacerbates inequality. The results point to a vicious cycle of inequality and costly borrowing.
Access to Finance --- Conspicuous Consumption --- Consumption --- Finance and Financial Sector Development --- Household Debt --- Inequality --- Living Standards --- Macroeconomics and Economic Growth --- Poverty Reduction --- Psychology --- Socioeconomic Status --- Veblen Goods
Choose an application
Household credit, especially for mortgages, has doubled over the past years in the new European Union member countries, raising concerns about the economic and social consequences of household indebtedness in the event of a macroeconomic crisis. Using household survey data for 2005, 2006, and 2007 for both old and new European Union members, this paper assesses the determinants of access to mortgage finance. It also examines whether mortgage holders were more likely to suffer financial distress compared with non-mortgage holders in the period before the global financial crisis. The analysis does not find any systematic evidence that mortgage holders are financially more vulnerable than renters or outright owners; in fact, the incidence of financial vulnerability generally fell between 2005 and 2007, possibly reflecting the strong income growth experienced by these countries over this period. In addition, although tenure status is more difficult to explain in the new European Union member countries, the analysis finds that many of the same drivers of tenure status in the older member countries generally drive tenure status in the newer member countries as well. Finally, there is no evidence that access to mortgage credit is based on expected income in the old or in the new European Union member countries.
Access to credit --- Access to Finance --- Access to mortgage --- Advanced economies --- Bank --- Bankruptcy and Resolution of Financial Distress --- Credit --- Debt Markets --- Emerging Markets --- Finance --- Finance and Financial Sector Development --- Financial distress --- Financial support --- Financing --- Household --- Household debt --- Households --- Housing Finance --- Indebtedness --- International bank --- Mortgage --- Mortgage credit --- Mortgage debt --- Mortgages --- Private Sector Development --- Union
Listing 1 - 2 of 2 |
Sort by
|