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Measuring households' financial fragilities: an analysis at the intersection of income, financial wealth and debt

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  • David Loschiavo

    (Bank of Italy)

  • Federico Tullio

    (Bank of Italy)

  • Antonietta di Salvatore

    (Bank of Italy)

Abstract

We provide an analysis of the financial fragilities of Italian households in the 2000-2020 period, using data from the Bank of Italy's Survey on Household Income and Wealth. We comment on the recent trends of financial ill-being, using different poverty measures, and we provide a descriptive analysis of fragile households' characteristics. We then model persistence in the dynamics of the poverty statuses using different specifications of the dynamic random-effects probit model to account for the observed and latent individual heterogeneity and endogeneity of the initial conditions. A strong state dependence is found in all the poverty statuses considered, with financial and liquidity poverty being the most persistent.

Suggested Citation

  • David Loschiavo & Federico Tullio & Antonietta di Salvatore, 2024. "Measuring households' financial fragilities: an analysis at the intersection of income, financial wealth and debt," Temi di discussione (Economic working papers) 1452, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1452_24
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    References listed on IDEAS

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    More about this item

    Keywords

    poverty persistence; state dependence; financial well-being; dynamic random-effects probit models;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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