The Measurement of Household Liabilities:

1
The Measurement of Household Liabilities
Conceptual Issues and Practice Jonathan
Crook Credit Research Centre University of
Edinburgh http//www.crc.ems.ed.ac.uk
lsw0
2

• Some Issues
• Demand for debt PIH. (Information on credit
  constraints)
• Supply
• Credit constraints
• Search
• Adverse selection
• Defaults/ difficulty repaying/ financial stress

lsw1
3
Percentage of Households with Debt
Source Crook (2005)
lsw1a
4
Percentage of Households with Debt
Source Crook (2005)
lsw1b
5
Sampling Units
lsw2
6
Table 2(a) Current Debt Outstanding by Type of
Debt
lsw3
7
Table 2(b) Current Debt Outstanding by Type of
Security
lsw3
4
8
Table 2(c) Current Debt Outstanding by Use of Debt
lsw5
9
Information on Mortgages 1
lsw6
10
Information on Mortgages 2
lsw7
11
Information on Credit Cards
lsw8
12
Information on Debt Owed to Buy Vehicles
lsw9
13
Information on Self Reported Credit Constraints
lsw10
14
Information Asymmetry and Lender Risk SCF
Member of HH ever been bankrupt? In arrears 2
years on a debt ? Ahead/behind/on schedule for
debt repayments? Has mortgage protection
insurance? SFS In arrears 2 years on a
(cc?) bill? HILDA Behind with credit
payments? All studies Liquidity ratios e.g.
liquid financial assets/liabilities
lsw12
15
Consumer Information Search (Crook 2002) SCF
Search 5 point likert scale Consumer
Attitudes Ferri Simon (2002), Crook
(2001) SCF 5 scales on attitude towards use of
debt for certain expenditures Ranking of 4
different combinations of risk and
return Relationships Chakravatti Scott
(1999), Ferri Simon (2002), Chakravatti
Yilmazer (2004) SCF Number of accounts with
each institution Length of time borrower has had
a relationship with the institution SHIW Length
of time HH has account with bank used most If
has loan from bank used most
lsw13
16
Conclusions Only aggregated categories
can be compared across countries mortgages and
other Comparisons by type of security or
use of debt is not possible For research
into demand, supply or credit constraints, more
data is needs to be collected by all studies
except possibly the SCF Self reported
credit constraints applications made, rejected,
discouraged (within same time
period) Credit Cards debt
outstanding after last payment, of balance
usually paid off type of card, credit
limit, number of cards actually used
Loans for home improvement and purchase of
vehicles debt currently outstanding,
interest rate, fixed or variable, payments,
period covered by repayment, number of
agreed payments, value of purchase.
Separate data on educational loans
Information on clustering of cases Inclusion
of probability sampling weights (inverse of
probability a case is sampled)
lsw14