Details
| Original language | English |
|---|---|
| Pages (from-to) | 1-23 |
| Number of pages | 23 |
| Journal | Journal of Asian Economics |
| Volume | 56 |
| Early online date | 24 Apr 2018 |
| Publication status | Published - Jun 2018 |
Abstract
This study analyzes the determinants of household over-indebtedness and its persistence for rural household borrowers in Thailand and Vietnam. A household is considered to be over-indebted if it is in default or arrears on a loan or if its ratio of debt service to income exceeds 50 percent. The persistence of over-indebtedness was tested using a Heckman random effects dynamic probit model controlling for the effect of household demographic, socioeconomic, and behavioral characteristics. For Thailand, but not for Vietnam, past experience of over-indebtedness increases the probability of being over-indebted in the present, controlling for other household characteristics. Village support systems in Vietnam may be more effective in delivering households out of over-indebtedness than in Thailand where heavy debt burdens are taken more for granted. Household characteristics that significantly increase the probability of over-indebtedness include poverty, household size, low education, overly optimistic forecasting of income, and a sense of being less well off than other villagers.
Keywords
- Household over-indebtedness, Microcredit, Persistence of over-indebtedness, Random effects dynamic probit model, Thailand, Vietnam
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Finance
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
Sustainable Development Goals
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In: Journal of Asian Economics, Vol. 56, 06.2018, p. 1-23.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Over-indebtedness and its persistence in rural households in Thailand and Vietnam
AU - Chichaibelu, Bezawit Beyene
AU - Waibel, Hermann
N1 - Publisher Copyright: © 2018 Copyright: Copyright 2018 Elsevier B.V., All rights reserved.
PY - 2018/6
Y1 - 2018/6
N2 - This study analyzes the determinants of household over-indebtedness and its persistence for rural household borrowers in Thailand and Vietnam. A household is considered to be over-indebted if it is in default or arrears on a loan or if its ratio of debt service to income exceeds 50 percent. The persistence of over-indebtedness was tested using a Heckman random effects dynamic probit model controlling for the effect of household demographic, socioeconomic, and behavioral characteristics. For Thailand, but not for Vietnam, past experience of over-indebtedness increases the probability of being over-indebted in the present, controlling for other household characteristics. Village support systems in Vietnam may be more effective in delivering households out of over-indebtedness than in Thailand where heavy debt burdens are taken more for granted. Household characteristics that significantly increase the probability of over-indebtedness include poverty, household size, low education, overly optimistic forecasting of income, and a sense of being less well off than other villagers.
AB - This study analyzes the determinants of household over-indebtedness and its persistence for rural household borrowers in Thailand and Vietnam. A household is considered to be over-indebted if it is in default or arrears on a loan or if its ratio of debt service to income exceeds 50 percent. The persistence of over-indebtedness was tested using a Heckman random effects dynamic probit model controlling for the effect of household demographic, socioeconomic, and behavioral characteristics. For Thailand, but not for Vietnam, past experience of over-indebtedness increases the probability of being over-indebted in the present, controlling for other household characteristics. Village support systems in Vietnam may be more effective in delivering households out of over-indebtedness than in Thailand where heavy debt burdens are taken more for granted. Household characteristics that significantly increase the probability of over-indebtedness include poverty, household size, low education, overly optimistic forecasting of income, and a sense of being less well off than other villagers.
KW - Household over-indebtedness
KW - Microcredit
KW - Persistence of over-indebtedness
KW - Random effects dynamic probit model
KW - Thailand
KW - Vietnam
UR - http://www.scopus.com/inward/record.url?scp=85046774286&partnerID=8YFLogxK
U2 - 10.1016/j.asieco.2018.04.002
DO - 10.1016/j.asieco.2018.04.002
M3 - Article
AN - SCOPUS:85046774286
VL - 56
SP - 1
EP - 23
JO - Journal of Asian Economics
JF - Journal of Asian Economics
SN - 1049-0078
ER -