| Abstract: | This paper is concerned with measuring the financial vulnerability (FV) of households arising from consumer debt. Our case of application is Chile. Our main finding is that by applying a methodology that allows for households' heterogeneities and that accounts for contextual factors (like motives for asking for debt, exposure to shocks, family structure, holdings of assets and perspectives of future income), we better quantify the risks that financially vulnerable households may entail to the financial system. |
