The importance of attitudes towards risk to explain indebtedness in Southern European countries

Abstract

The aim of this paper is to analyse the socio-demographic determinants and individuals’ attitudes towards risk to explain indebtedness in Southern European countries. This analysis is done within the context of an increasing process of financialization of individual behaviour. We use the Household Finance and Consumption Survey (HFCS), drawn up by the European Central Bank between 2009 and 2011. The methodological plan consists of a combination of a multiple correspondence analyses in order to identify the various household debt models and a logistic regression analysis in order to detect the explanatory variables that best explain the differences between indebtedness models. The main contribution of this paper is the identification of those variables that explain the economic differences in household debt levels. Results are showing a relevant influence of individual attitudes to explain indebtedness in Southern Countries in detriment of sociodemographic variables which are not relevant explanatory factors.