消费信贷的决定因素外文翻译.docx

1、消费信贷的决定因素外文翻译外文翻译原文The Determinants of Consumer CreditMaterial Source: Source: Consumer Credit in EuropeRisks and opportunities of a Damnic Industryy Author:Daniela Vandone1 IntroductionThe literature of consumer credit is sizeable. Such a body of work reflects not only the composite nature of unsec

2、ured debt, but also the fact that different methodological approaches exist depending on the research questions under analysis and the objectives sought.Four main approaches can be seen: a management approach, which focuses on the characteristics of the credit industry, its workings and the policies

3、 adopted by supply-side players; a legal approach, which investigates the impact the regulatory framework has on competition and consumer protection; a socio-psychological approach, which analyses how individuals are affected by consumption behavior and indebtedness choices; an economic approach, wh

4、ich for the most part concentrates on the determinants of the demand for and supply of consumer credit and on an analysis of the characteristics of individuals and households in debt.In this chapter we will discuss the economic approach with the aim of providing an outline of the individual and inst

5、itutional factors that are considered in the literature as determinants of consumer credit, its diffusion and distribution amongst different segments of the population.The economic models referred to are based on the economic rationality of individuals, who seek to increase living standards by smoot

6、hing consumption over different periods of their lives through saving and borrowing decisions. According to these models, consumer credit demand and supply is determined by individual factors, i.e. socio-demographic and economic factors, as well as by institutional factors, i.e. the institutional co

7、ntext in which borrowers and lenders are placed.These studies, which first appeared in the second half of the twentieth century, have been flanked in recent years by work in behavioral economics, which focuses instead on the psychological variables that influence an individuals behavior and which ha

8、ve revealed that this behavior is at odds with the rational choices posited by traditional economic models.The analysis of the literature offered here, rather than attempting to represent an exhaustive summary of empirical estimations and economic models used by the authors of the various works cite

9、d, more modestly aims to provide a basis for specific investigations into the diffusion of consumer credit in Europe, the nature of the consumer credit industry, the causes of over-indebtedness and the most appropriate policy responses to the problem.2 The Life-Cycle and Permanent Income TheoriesThe

10、 theoretical economic framework for consumption, saving and indebtedness decisions developed within the Life-Cycle theory, developed by Modigliani and Brumberg 1954, and the Permanent Income Hypothesis, proposed by Friedman in 1957.（1）The central idea of these inter-temporal consumption choice model

11、s is that households make their consumption choices (and consequently those relating to saving and indebtedness) on the basis of their wealth, current disposable income and future income expectations so as to guarantee a uniform level of consumption over their lifetimes.The underlying assumption of

12、these models is that income is generally low in an individuals early working life and tends to rise towards retirement. Individuals at the start of their working life, expecting higher future income receipts, finance the purchase of assets in order to raise consumption over the level offered by curr

13、ent income. Nearing the end of their working lives, inversely, individuals raise savings levels in preparation for retirement when spending will be greater than earnings. Within this framework, saving and indebtedness guarantee heightened economic welfare by smoothing out consumption over time.In th

14、e standard theory, named as such by Modigliani himself, the economic model posits that choices regarding households consumption levels over different periods of their life are subject to an inter-temporal budget constraint. Consequently, they may decide in a certain year to spend more than available

15、 income by running down all or part of their assets and/or by borrowing, provided that such a solution is temporary and that they die solvent.（2）Considerable further empirical analyses of the theory have stressed the need for the standard model to take into account two additional aspects (Ando and M

16、odigliani 1957; Modigliani et al. 1985; Modigliani 1988; Deaton 1992; Alessie et al. 1997; Attanasio 1999): Households demand for debt is subject to factors other than income and wealth; House holds may be liquidity constrained.Table 1.1 Consumer credit demand and supply factorsCREDIT DEMANDINDIVIDU

17、AL FACTORSSocio-demographicAgeEducationSize and composition of familyEconomicIncome WealthUncertaintyINSTITUTIONAL FACTORSEfficiency of justice systemInformation-sharingInformal credit marketsCREDIT SUPPLYEncompassing these aspects effectively implies the model should address variables that influenc

18、e both the demand and supply sides of the credit market (Table 1.1). These variables can be either individual or institutional. Individual factors regard the characteristics of an individual and his/her household and can be classified into two classes: socio-demographic (for example, age, size and c

19、omposition of the family, education) and economic (for example, employment status, work profiles, financial assets).Institutional factors that characterize local credit markets include the justice system, the existence and quality of information-sharing mechanisms amongst financial institutions, and

20、 the presence of informal credit circuits (borrowing from relatives and friends).The same variables, individual and institutional, influence both credit demand and supply, albeit not always to the same extent and in the same direction.（3）3 Empirical FindingsEmpirical analyses aimed at studying the d

21、eterminants of household credit markets and their coherence with Life-Cycle and Permanent Income models focus on the following areas, according to the research questions they investigate: Participation in the credit market Level of borrowing Cross-country characteristics Risk of over-indebtedness Cr

22、edit constraintsWork across these areas examines both individual and institutional variables. Analysis has typically concentrated on the demand side, though a branch of study has used economic4 Behavioral EconomicsBehavioral economics has in recent years proposed alternative theories to Life- Cycle

23、and Permanent Income models (Brown et al. 2005; Karlsson et al. 2004; Ranyard et al. 2006; Stone and Vasquez Maury 2006; Supriya et al. 2005; Poppe 2008; Yang et al. 2007; Graham and Isaac 2002). These studies have focused on behavioral aspects that may significantly influence individuals decisions

24、relating to spending, saving or indebtedness. These aspects differ from the socio-demographic and economic variables analyzed within the economic models discussed in the previous paragraphs.The research models adopted within behavioral economics are based on empirical results and anomalies regarding

25、 consumer behavior that conflict with traditional notions of economic rationality. Several studies have in fact shown how the behavior of individuals deviates systematically from the rational choice model of standard economic theories without implying that such behavior is irrational.（8）Individual c

26、hoices are influenced by psychological factors, such as personal taste, forecasting errors and impatience, which as a result prevent individuals from maximizing future utility (Kilborn 2005; Meier and Sprenger 2007).Three main psychological factors are identified in the literature as inducing indivi

27、duals to make non rational borrowing choices: Overconfidence bias Availability heuristicHyperbolic discountingStudies carried out within behavioral economics have also shown that individuals have little awareness of the existence and consequences these psychological mechanisms have. Indeed, individu

28、als in financial difficulties tend to lay the blame on exogenous factors such as illness, divorce or job loss, which reduce incomes levels below those expected. Rarely do individuals recognize that the causes for their difficulties lie principally or at least also with their inability to manage mone

29、y and the decisions made regarding spending and indebtedness. Furthermore, many studies have shown how deviant behavior patterns persist even when individuals are aware of the risks they face. Individuals incapacity to take corrective steps despite knowing of the dangers of over-indebtedness may hav

30、e significant repercussion designing effective policies for the management of situations of indebtedness that are already or are at risk of becoming pathological9 (Kilborn 2005; Watson 2003; Lea et al. 1995).5 Summary of the Determinants of the Demand for and Supply of Consumer CreditThe economic mo

31、dels of the Permanent Income and Life-Cycle theories continue to be used as a framework for analysis of households consumption, saving and indebtedness decisions (Jappelli 2005).However, work in behavioral economics has made an important contribution in drawing attention to the role played not only

32、by socio-demographic and economic variables, but also psychological factors as determinants of the demand for unsecured debt. It has also been shown how psychological factors have an impact on the effectiveness of policies adopted to prevent ex ante and manage ex post financial difficulties arising from over-indebtedness.Table 1.3 provides a summary of the factors influencing the demand for and supply of consumer credit. As can be seen, the signs (+) and () are not always homogeneous and have varying degrees of intensi