Debt and depression
- ISSN: 01676296
- ISBN: 1879-1646 (Electronic) 0167-6296 (Linking)
- DOI: 10.1016/j.jhealeco.2010.02.003
- PubMed: 20338649
We examine the effect of household financial indebtedness on psychological well-being using a large household survey of families with children in Britain. Existing studies that find a link between debt and depression tend to utilise small and highly selective samples of people and only self-reported measures of financial stress, responses to which are likely to correlate with subjective measures of health. From additional household data, we can construct a variety of 'objective' quantitative measures of financial stress in order to validate self-reported measures. We show that, although there is a positive association between subjective measures of financial well-being and psychological well-being, individuals differ in their psychological response to objective household financial situations. We also examine how the potential simultaneity of financial and psychological health might be handled. © 2010 Elsevier B.V.