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Which Loans do We Take? A Micro-Level Analysis of Croatian Households’ Debt Participation

Author

Listed:
  • Mate Rosan

    (Croatian National Bank)

  • Krunoslav Zauder

    (Croatian National Bank)

Abstract

This paper uses a new data set in order to explore micro-level patterns of household borrowing in Croatia. By analyzing cross-section data from the Household Finance and Consumption Survey, conducted for the first time in Croatia in 2017, we present the structure of household debt holdings and identify several household characteristics associated with debt participation in three types of debt: secured debt, non-collateralized loans as well as overdrafts and/or credit card debt. Our results indicate that: a) households with middle aged heads tend to participate more and hold larger amounts of all three debt types, b) households with perceived credit constraints are more likely to take non-collateralized loans, and c) inability to finance consumption and willingness to take risks when making saving and investment decisions contribute to participation in overdrafts and/or credit card debt.

Suggested Citation

  • Mate Rosan & Krunoslav Zauder, 2020. "Which Loans do We Take? A Micro-Level Analysis of Croatian Households’ Debt Participation," Working Papers 61, The Croatian National Bank, Croatia.
    • Handle: RePEc:hnb:wpaper:61
    as

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    File URL: http://www.hnb.hr/repec/hnb/wpaper/pdf/w-061.pdf
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    References listed on IDEAS

    as
    1. Atif Mian & Amir Sufi & Emil Verner, 2017. "Household Debt and Business Cycles Worldwide," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1755-1817.
    2. Atif Mian & Amir Sufi, 2018. "Finance and Business Cycles: The Credit-Driven Household Demand Channel," Journal of Economic Perspectives, American Economic Association, vol. 32(3), pages 31-58, Summer.
    3. repec:ucp:bkecon:9780226081946 is not listed on IDEAS
    4. Jonathan Zinman, 2015. "Household Debt: Facts, Puzzles, Theories, and Policies," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 251-276, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    household debt; secured vs. unsecured debt; age profiles of borrowing; credit constraints; Household Finance and Consumption Survey;
    All these keywords.

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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