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Racial/Ethnic Disparities in Household Debt Repayment

Lee, Jonghee
http://rave.ohiolink.edu/etdc/view?acc_num=osu1244055120

Abstract Details

2009, Doctor of Philosophy, Ohio State University, Family Resource Management.
This study proposes to gain insight into which key factors influence household debt repayment; whether these key factors differ across racial/ethnic groups; and whether these factors result in racial/ethnic variance. In particular, this study aims first to: (1) account for household characteristics related to repayment delinquency, (2) examine whether race and ethnicity are related to debt payment problems, even controlling financial events that might cause a decrease or disruption in the flow of periodic household income, financial buffers available in emergency and any other demographic variable and (3) examine how the effects of key factors differ across race and ethnicity. This study analyzes factors related to getting behind or missing payments on household debt by two months or more using the 1992 to 2007 Survey of Consumer Finances. This study defines payment delinquency according to two SCF questions asking (1) whether payments on any loans were sometimes late or missed, and (2) whether the respondent was ever behind in his or her payments by two or more months. Following this, this study will investigate reasons the propensity toward payment delinquency on household debt might differ by race and ethnicity. Finally, this study aims to address the sample selection bias that can affect predictors of delinquency risk in a given population of applicants. Therefore, this study tests for whether the coefficient of the selection effect is significantly different from zero. Finally, the results of this study have implications for financial education programs targeted at different racial/ethnic groups. A logit selection model is used, with the first stage being whether the household had any debt, and the second stage being whether payments on any of the debt were made late or missed by two months or more. This study tests the effect of consumers’ financially adverse events, financial buffers and household debt burden on household debt repayment delinquencies. This study expects that Black and Hispanic households with debt would have the same delinquency rates as whites, conditional on any other demographic and economic characteristic. A probit analysis of having household debt shows that blacks, Hispanics, and Asians/others are less likely to have household debt than whites. There is a significant selection effect. The logit analysis of being delinquent shows that blacks are significantly more likely to be delinquent than Whites, but Hispanics are significantly less likely to be delinquent than Whites. Asians/others are not significantly different from otherwise similar whites. This study shows that there exist racial/ethnic differences in repayment delinquency behavior not only between white and minority households but between blacks and Hispanics.
Sherman Hanna, Dr. (Committee Chair)
Jinkook Lee, Dr. (Committee Member)
Lucia Dunn, Dr. (Committee Member)
229 p.
Economics; Families and Family Life; Finance
Debt Repayment; Racial/Ethnic Disparity; The Survey of Consumer Finances

Recommended Citations

Citations

  • Lee, J. (2009). Racial/Ethnic Disparities in Household Debt Repayment [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1244055120

    APA Style (7th edition)

  • Lee, Jonghee. Racial/Ethnic Disparities in Household Debt Repayment. 2009. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1244055120.

    MLA Style (8th edition)

  • Lee, Jonghee. "Racial/Ethnic Disparities in Household Debt Repayment." Doctoral dissertation, Ohio State University, 2009. http://rave.ohiolink.edu/etdc/view?acc_num=osu1244055120

    Chicago Manual of Style (17th edition)

osu1244055120
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© 2009, all rights reserved.
This open access ETD is published by The Ohio State University and OhioLINK.