Who is in Debt? A Class Based Analysis of Consumption on Credit

• In Event: 237 - Regular Session. Economic Sociology. Debit and Credit

Abstract

This paper uses the Survey of Consumer Finances to examine factors influencing the indebtedness of U.S. households in 2010. In particular, the role of structural constraints, institutional conditions and cultural forces on indebtedness are assessed. Two central questions motivate this work. First, what drives household debt—is it economic vulnerability, a culture of debt or status based consumption? Second, how does the impact of structural and cultural forces on indebtedness vary by class position? Results from one set of analyses illustrate that cultural, structural, cognitive and institutional forces are embedded in economic action. Findings from the second set of analyses indicate that class position, which engenders significant variation of not just structural factors (income liquidity and net wealth), but institutional (state transfers) and cultural ones (attitudes and status), matters in determining how households consume. Two relatively new norms—one of virtuous investment, and a second regarding the acceptability of credit use—interact with growing inequality to pattern households’ consumption of credit according to social class membership.

Author

• Zaibu Nissa Tufail, University of California-Irvine