Essays on social interaction and financial behavior
Başlık çevirisi mevcut değil.
- Tez No: 401574
- Danışmanlar: PROF. MICHAEL HALIASSOS
- Tez Türü: Doktora
- Konular: Ekonomi, Economics
- Anahtar Kelimeler: Belirtilmemiş.
- Yıl: 2014
- Dil: İngilizce
- Üniversite: Goethe-Universität Frankfurt am Main
- Enstitü: Yurtdışı Enstitü
- Ana Bilim Dalı: Belirtilmemiş.
- Bilim Dalı: Belirtilmemiş.
- Sayfa Sayısı: 125
Özet
Özet yok.
Özet (Çeviri)
The first essay, entitled“The Relationship between Sociability and Household Debt”, addresses the question of how social interaction is related to the probability of holding debt and the amount of debt held. I examine the influence of social interaction on mortgage debt and non-mortgage debt, with using data from the Survey of Health, Ageing, and Retirement in Europe. I construct a sociability indicator, following Hong, Kubik, and Stein (2004), in order to proxy the social interaction. Households are classified as sociable if at least one of the household members participated in one of the social activities (including sport club, educational course, political organization and charity work) in the previous month. For my pooled sample consisting of thirteen European countries, I find that sociability has significant positive effects both on mortgage debt and on non-mortgage debt, controlling for a wide range of household characteristics and country dummies. In more detail, sociable households are 1.6 (2.7) percentage points more likely to hold mortgage (non-mortgage) debt, and have 18 (25) percent more mortgage (non-mortgage) debt conditional on holding such debt. These results show that the effect of sociability is stronger for non-mortgage debt than for mortgage debt. In addition, I find these significant positive effects of sociability when the variation in participated activities and the frequency of participations are also considered in my sociability indicator. Households who participated in more varied activities and those who participated more frequently in the activities have higher likelihood of borrowing and higher amounts for both mortgage and non-mortgage debt. Sociability might contribute positively to debt holding via several plausible channels. People mostly do not prefer to talk about their indebtedness or to show their debt amounts, because of being ashamed. But still, when they are in financial difficulty, they could ask their friends for financial advice or for money. Besides, people may compare themselves with their social group, thus incur debts to do conspicuous consumption (Becker and Rayo 2006) and to emulate the spending or living standards of the others (Georgarakos, Haliassos, and Pasini, forthcoming). There are also some possible ways of reverse causality from debt to sociability; and I examine four of them in my essay. Households in financial difficulties might involve more in social activities to meet wealthy people and borrow directly from them, or to meet financially informed people and get some advice. These households might also attend the activities with the aim of earning money, or they might go to educational courses for improving their skills to have a job. When I check each of these possibilities, I find that the effects of sociability on mortgage and non-mortgage debt remain nearly unchanged. The countries in my sample display considerable variation in sociability rates as well as the fractions of debt-holders and the amounts of debt-holdings. Moreover, the relationship between sociability and debt also varies largely across countries. Germany is the only country having significant positive influence of sociability on both mortgage and non-mortgage debt. Also, Belgium and the Netherlands have significant social influence only for mortgage debt, while Sweden, Austria and Czech Republic have significant influence only for non-mortgage debt. The other countries (Denmark, France, Switzerland, Italy, Spain, Greece and Poland) have no significance at all. Some of the European countries have been experiencing debt crisis in the recent years; and my sample includes three of them, which are Greece, Spain and Italy. In spite of their high sovereign debt levels, these fiscally troubled countries do not have higher prevalence or amount of household debt compared to the other countries. When the effect of sociability on debt is analyzed for fiscally-troubled and non-troubled groups of countries separately, I find insignificant effects for the former group and highly significant effects for the latter. To the best of my knowledge, this essay is one of the first that investigate the relation between social interaction and debt behavior, and also the first to do so in an international dimension. My findings show that sociability is related to household debt; nonetheless, this relation is not found for all countries. 1.2.2. International Patterns of Participation in Social Activities and Financial Behavior The second essay, entitled“International Patterns of Participation in Social Activities and Financial Behavior”, analyzes the international differences in participation in social activities and studies the influence of these participations on financial behavior. In the first essay, I investigate the effect of sociability on household debt for thirteen countries from different regions of Europe. On the basis of my sociability indicator, the data report that the fractions of sociable households, contrary to the expectations, are much higher in northern (Sweden and Denmark) and western (Germany, the Netherlands, Belgium, France, Switzerland and Austria) countries relative to those in southern (Italy, Greece and Spain) and eastern (Czech Republic and Poland) countries. Accordingly, this second essay also uses data from the Survey of Health, Ageing, and Retirement in Europe, and examines the participation of older individuals in social activities thoroughly. I focus on four types of social activities which are also used in the first essay to construct the sociability indicator: 'doing voluntary or charity work', 'attending educational or training course', 'going to sport, social, or other kinds of club' and 'taking part in political or community-related organization'. For each of these social activities, I look at not only the participation levels, frequencies and motivations, but also the determinants of participation and the sources of differences in participation across European countries. The descriptive statistics report that northern and western countries mostly have much higher participation rates than southern and eastern countries for each of the four activities. Moreover, the fraction of individuals who attended more varied activities is also higher in the high participation countries. On the other hand, the frequency and the motivation of social participation vary with the type of activity; but countries typically follow similar patterns for each activity. In spite of the differences in the main motivations of activities, 'to meet other people' is quite important for all four types of activities. My findings show that the participation of elders in social activities is positively related with education, trust and life satisfaction, whereas negatively related with risk aversion and poor health. This holds true in many of the countries for all four activities. Participation in social activities is also associated with better financial status, that is lower financial distress, higher income and higher net wealth; but these associations exist only in few countries, except for sport club having significance in most countries. Besides, social participation has strong correlation with age, gender and work status; however, the direction of the correlations differs across countries for age, and across activities for gender and work status. I apply the methods of counterfactual analysis to study the differences in participation rates across European countries. I find that the observed differences, compared to Germany, result predominantly from different environments in northern and western countries for all social activities, while in southern and eastern countries these differences are generally result from differences in the environment for voluntary work, differences in the characteristics of individuals for educational course, and differences in both the environment and individual characteristics for sport club. This essay also examines the relationship between participation of individuals in social activities and their financial behavior. I firstly analyze the effect of sociability –participation in at least one of the four activities– on stock holding and debt holding. My results show that sociable individuals are more likely to hold direct and indirect stocks as well as mortgage and non-mortgage debts; besides, conditional on having the given type of stock (debt), they invest (borrow) in larger amounts. These results are in line with those of Georgarakos and Pasini (2011) for stocks and those of my first essay for debts. Secondly, I study the effect of each of the four social activities separately, and find that there are mostly distinct positive effects on stocks for all activities other than political organization, and on debts for all activities other than voluntary work. Finally, I examine the effect of sociability for four regions of Europe which have substantial differences in their social participation rates. The effects are generally stronger for Southern and Eastern Europe than for Northern and Western Europe.
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