This paper constitutes an initial attempt to shed light on the role of income distribution in household debt, macrofinancial stability and financial market access in Central, Eastern and Southeastern Europe (CESEE). Using data from the OeNB’s Euro Survey for the period 2009-2018, we address the question whether interpersonal comparisons (i.e. “keeping up with the CESEE Joneses i.e. the Novaks”-channel) affect households’ probability of having and planning a loan. We use multilevel probit modeling to take into account the hierarchical structure of the data. Our results support the notion that increasing income inequality is negatively associated with the probability of having a loan at the bottom of the distribution, and positively at the top. We show this impact for almost all components of household debt, but evidence is strongest for mortgage, car and foreign-currency loans. Interpersonal comparisons turn out to drive loan intentions, however, mainly on the very top of the income distribution.
17 Sep. 2019 → 18 Sep. 2019
Experiences and Challenges in Measuring Income and Wealth in CIS Countries and Eastern Europe Special IARIW-HSE Conference, Moscow, Russia
Österreichische Systematik der Wissenschaftszweige (ÖFOS)