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Credit Card Indebtedness and Psychological Well-Being Over Time: Empirical Evidence from a Household Survey

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  • SHUYING SHEN
  • ABDOUL G. SAM
  • EUGENE JONES

Abstract

type="main" xml:id="joca12047-abs-0001"> While a number of studies have investigated the relationship between debt and psychological well-being, none so far has explored if and how this relationship evolves over time. We seek to fill this gap in the literature by empirically analyzing the impact of household credit card debt on debt stress. Using cross-sectional data collected by The Ohio State University's Consumer Finance Monthly survey between August 2008 and December 2010, we construct a debt stress index and categorize households into three groups based on the length of credit card indebtedness. Our empirical results provide statistical evidence of time-varying impacts of credit card debt on stress levels. Specifically, we find that debt stress for short-run debtors is more than twice that of long-run debtors. The results are robust across a range of econometric specifications.

Suggested Citation

  • Shuying Shen & Abdoul G. Sam & Eugene Jones, 2014. "Credit Card Indebtedness and Psychological Well-Being Over Time: Empirical Evidence from a Household Survey," Journal of Consumer Affairs, Wiley Blackwell, vol. 48(3), pages 431-456, October.
    • Handle: RePEc:bla:jconsa:v:48:y:2014:i:3:p:431-456
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    2. Fen Nee Chong, 2017. "Factors Affecting Credit Card Debt Payment in Malaysia," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 16(1), pages 21-30, June.
    3. Cesar Leandro, Julio & Botelho, Delane, 2022. "Consumer over-indebtedness: A review and future research agenda," Journal of Business Research, Elsevier, vol. 145(C), pages 535-551.
    4. French, Declan & Vigne, Samuel, 2019. "The causes and consequences of household financial strain: A systematic review," International Review of Financial Analysis, Elsevier, vol. 62(C), pages 150-156.
    5. Carton, F.L. & Xiong, H. & McCarthy, J.B., 2022. "Drivers of financial well-being in socio-economic deprived populations," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    6. Bashir Ahmad Joo & Simtiha Ishaq Mir, 2024. "Evolution of the Household Debt Narrative: A PRISMA-compliant Systematic Literature Review," Paradigm, , vol. 28(1), pages 84-100, June.
    7. Pankaj K. Maskara & Florence Neymotin, 2021. "Do Credit Unions Serve the Underserved?," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 47(2), pages 184-205, April.
    8. Lingjing Wang & Cheng Qian & Philipp Kats & Constantine Kontokosta & Stanislav Sobolevsky, 2017. "Structure of 311 service requests as a signature of urban location," PLOS ONE, Public Library of Science, vol. 12(10), pages 1-21, October.

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