Korean Journal of Human Ecology (한국생활과학회지)

Korean Association of Human Ecology (한국생활과학회)
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Determinants of Households with Risky Debts

부채 취약가계 결정 요인

  • Baek, Eun-Young (Dept. of Asset Management, Kyung Hee Cyber University) ;
  • Sung, Yong-Ae (Dept. of Consumer & Child studies, University of Incheon)
  • 백은영 (경희사이버대학교 자산관리학과) ;
  • 성영애 (인천대학교 소비자아동학과)
  • Received : 2012.01.16
  • Accepted : 2012.04.05
  • Published : 2012.04.30
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Abstract

The purpose of this study was to investigate the determinants of households with risky debt loads. The study used financial ratios to determine which households were over-indebted. The 3 ratios used were Debt to Asset ratio, Debt to Financial asset ratio, and Debt Service ratio. Data for this study was the 2011 Survey of Household Finance. Households that demonstrated total debts of 70% or more when compared to total assets were 8.8%. Households that demonstrated a debt load totaling 5 or more times their total financial assets were 19%. Households with monthly repayment obligations of 40% or more of disposable income were 20%. Households that fulfilled all 3 financial ratio criteria were 1.5% of total indebted households. Over-indebted households demonstrated severe economic condition in terms of debt, but not all over-indebted households were categorized as being in economically vulnerable group. The major determinants of households with risky debts were income, asset, purpose of loans, and spending behavior of the households.

Keywords

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