بدهی و پریشانی: بررسی هزینه های روانی اعتبارات

In this paper we explore the association between debt and psychological well-being amongst heads of households using the British Household Panel Survey. Our principle finding is that those household heads who have outstanding (non-mortgage) credit, and who have higher amounts of such debt, are significantly less likely to report complete psychological well-being. The average increase in the psychological distress is greater when outstanding credit is measured at the individual, as opposed to household, level. No such significant association is found in the case of mortgage debt. Our results highlight the psychological cost associated with the consumer credit culture in Britain.

There was a consumer credit explosion in the UK between 1994 and 2004. This accompanied the sustained economic boom during this period and followed on from the gradual relaxation of credit constraints in the late 1980s and early 1990s. The increased availability of unsecured credit is clear from the massive rise in the number of different credit cards available (over 1300 in the UK, in 2000) and the broadening of the range of financial institutions offering unsecured loans. From once being primarily the preserve of the major banks, loans can also now be readily obtained from building societies, UK and overseas-based finance companies and, even, supermarkets. In addition, the advent of telephone and internet-banking, and the availability of credit at the point of purchase, has increased the accessibility of consumer credit and the speed with which loan contracts are made. Fig. 1 illustrates the dramatic escalation in the total value of outstanding consumer credit in the UK, between 1982 and 2002 (measured in 1995 pounds sterling and excluding mortgage debt). Less than 1% of this change can be explained by the 5% growth in the size of the UK population during this period. Most of the increase has arisen from the rise in the value of loans arranged directly (e.g. personal loans) or indirectly (e.g. hire purchase agreements) with financial institutions (the Other category). A growing proportion of outstanding consumer credit has been obtained through the use of credit cards. As a percentage of GDP, the amount of unsecured borrowing accumulated by individuals and households doubled, between 1993 and 2002, to 16%. By the end of 2004 the total amount of outstanding (non-mortgage) credit was over £185 billion (in current prices), an average of more than £4800 for every adult of working age in the UK. Full-size image (10 K) Fig. 1. Outstanding consumer credit (1995 prices). Notes: The data were obtained from the UK Government’s National Statistics ‘Time Series Data’ website at http://www.statistics.gov.uk/. Figure options Monetary policymakers have become concerned about the extent of personal indebtedness, its sustainability and impact on aggregate economic performance (e.g. Bank of England, 2004, pp. 9–10). However, there is also considerable concern from social welfare lobbyists, amongst others, about the associated increase in the number of individuals and families with problematic levels of personal debt. For example, members of the National Association of Citizens Advice Bureau in the UK dealt with approximately one million new personal debt enquiries during 2002 (NACAB, 2003). Over two-thirds of these contacts were associated with consumer credit arising from bank loans, credit and store cards (whose interest rates are typically two or three times those of the banks), catalogue debts and hire purchase agreements. Many of their clients were also in arrears with regard to housing rent, council tax and utilities bills. Additionally, they report a 47% increase in the number of new contacts in this area over the period 1997–2002 (and a 25% increase in the number of personal insolvencies, to 30,587). A quarter of these clients reported anxiety, depression and stress problems that resulted in them seeking medical treatment (NACAB, 2003). In this paper we examine the extent to which having outstanding credit influences the psychological well-being of household heads in the population as a whole, using data from the 1995 and 2000 waves of the British Household Panel Survey. Our main hypothesis is that debt may be associated with increased levels of psychological distress, a relationship which is most likely to hold amongst the principal financial decision-makers in a household. Furthermore, we anticipate that unsecured debt is likely to have a greater influence on psychological well-being than secured debt. It is therefore crucial that we can, at least broadly, differentiate between these two types of debt in our empirical analyses. It is also critical that we distinguish between financial liabilities and financial assets, rather than aggregate them together into an overall measure of net wealth, allowing us to explore whether their associations with psychological well-being might be asymmetric. It is important to clarify, at this point, that we use the terms borrowing, credit, debt and indebtedness interchangeably in this paper. However, as Webley and Nyhus (2001, p. 426) point out these terms have distinct meanings in the psychology literature (and elsewhere). Specifically, whilst borrowing is planned and intended and may involve the granting of credit, it “is possible to have a debt problem without ever having borrowed money”. In contrast “Debt is unplanned and unintended and may be … a stage (for some) en route to default and bankruptcy”. The principal empirical finding in this paper is that those heads of households who have outstanding credit, and who have higher amounts of such debt, are significantly less likely to report complete psychological well-being. The average increase in the psychological distress associated with this form of indebtedness is greater when outstanding credit is measured at the individual, as opposed to household, level and exceeds that from mortgage debt. The paper is organised as follows. In Section 2 we review the contribution of previous studies, from both the economics and psychology literatures, to our understanding of psychological well-being and indebtedness. In Section 3, we introduce our data source, define the measures we employ and describe our sample. Our empirical methodology is explained in Section 4 and the estimates from our statistical models are discussed in Section 5. We summarise our findings and present our conclusions in Section 6.

In this paper we have explored the impact of debt on the self-reported psychological well-being of household heads in Great Britain. Our ordered probit estimates are based on a balanced panel sample from the 1995 and 2000 waves of the British Household Panel Surveys. The evidence confirms our main hypothesis, that debt is associated with increased levels of psychological distress. We also find that unsecured debt, as measured by outstanding (non-mortgage) credit, has a greater negative influence on psychological well-being than secured (mortgage) debt, for whom no significant statistical relationship is found. Furthermore, we have shown that the psychological effects of being in debt and being a regular saver are not only opposing but asymmetric at the individual level. Our estimated marginal effect of having outstanding credit is nearly double that of being a regular saver. Finally, we find no positive psychological benefit from investments, windfalls or house values justifying our disaggregated approach to controlling for assets and liabilities. Simple simulations have revealed that plausible proportionate changes in outstanding credit levels are associated with a non-trivial decrease in the probability of reporting the highest level of-psychological well-being. For an otherwise average individual a 10% increase in the level of individual outstanding credit would need a 7% increase in monthly income, or a 18% increase in annual savings, to offset the negative impact on their psychological well-being. Additionally, we have presented some econometric evidence, which suggests that our estimates of the size of the exogenous outstanding credit effects are downwardly biased. We conclude that there may be a substantive psychological cost associated with consumer credit culture in Britain. Future government policy perhaps ought not to just focus on the potential macroeconomic consequence of the rising levels of consumer indebtedness in the UK but also take consider the more general welfare effects of increased psychological distress amongst debtors.