Debt and depression: causal links and social norm effects

Publication type

Journal Article

Author

Publication date

June 1, 2012

Summary:

Individuals exhibiting problems repaying their debt obligations also exhibit much worse psychological health. Selection into problem debt on the basis of poor psychological health accounts for much of this difference. The causality between problem debt and psychological health may be two way. Using individual level UK panel data, local house price movements exogenous to individual households are used to establish the causality from problem mortgage debt to psychological health. In addition, the social norm effects of problem debt are investigated using local bankruptcy and repossession rates. Results indicate there are sizeable causal links and social norm effects in the debt–psychological health relationship.

Published in

Economic Journal

DOI

http://dx.doi.org/10.1111/j.1468-0297.2012.02519.x

ISSN

14680297

Subjects

Notes

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