Research on the Impact Mechanism of Social Interaction and Household Debt on Income Gap

Abstract

Abstract: By establishing an interactive basic model including household debt and a two-sector model of household debt and income gap, this paper tries to mathematically prove the impact mechanism of social interaction and household debt on income gap, then combined with the data from the 2013 China Household Finance Survey, it conducts an empirical test by means of Probit, Tobit and other methods. The research results show that social interaction has a positive effect on household debt, that the increase in household debt is one of the factors leading to the widening of the income gap, and social interaction has a promoting effect on this impact, and that the impacts of social interaction on household debt are different due to the differences of family location, educational background and risk attitudes. The policy authorities need to broaden the channels for exchange of financial information, strengthen the supervision on informal finance, control the proportion of formal and informal financial channels, and increase the attention to household assets and liabilities.

Key words: social interaction, household debt, income gap, China Household Finance Survey

CLC Number:

F036

HU Zhong-li, WANG Shu-hua, CUI Ze-yuan. Research on the Impact Mechanism of Social Interaction and Household Debt on Income Gap[J]. Journal of Jiangxi University of Finance and Economics, 2020, 0(2): 37-50.

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