Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71144
Authors: 
Georgarakos, Dimitris
Haliassos, Michael
Pasini, Giacomo
Year of Publication: 
2012
Series/Report no.: 
CFS Working Paper 2012/05
Abstract: 
Debt-induced crises, including the subprime, are usually attributed exclusively to supply-side factors. We examine the role of social influences on debt culture, emanating from perceived average income of peers. Utilizing unique information from a household survey representative of the Dutch population, that circumvents the issue of defining the social circle, we consider collateralized, consumer, and informal loans. We find robust social effects on borrowing, especially among those who consider themselves poorer than their peers; and on indebtedness, suggesting a link to financial distress. We employ a number of approaches to rule out spurious associations and to handle correlated effects.
Subjects: 
Household Finance
Household Debt
Social Interactions
Mortgages
Consumer Credit
Informal Loans
JEL: 
G11
E21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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