Page 271 - Contributed Paper Session (CPS) - Volume 6

CPS1925 Marek K.
stable financial situation (which is necessarily accompanied by a higher income
level), and these cards are typically not a tool for emergency borrowing (see
the relationship between Factor 2 and Factor 3) – even when respondents use
the entire limit in the card.
Emergency borrowing is described by Factor 3. It concerns a situation
when debt is a consequence of difficulties in covering current costs. Although
this type of indebtedness is the most dangerous form of debt, it is not – as
already mentioned – associated with a sense of nuisance. At the same time,
credit cards are not a tool for incurring this type of debt.
The presented results raise the question about the nature of the excessive
borrowing phenomenon in the context of Polish households. Excessive
borrowing and insufficient savings can be seen as a product of bounded
rationality (among the psychological mechanisms that can lead to this type of
behavior is distinguished myopia, procrastination, optimism bias,
“miswanting”, and so-called cumulative cost neglect). The obtained results
indicate that such behaviors are not necessarily related in Poland to forms of
indebtedness perceived as riskier (emergency debt, credit card debt). The main
burdens – including burdens that are perceived by the respondents as onerous
- are associated with “conventional” debt.
Comparing the identified aspects of saving and borrowing, it is worth
paying attention to the time horizon. While pension savings were separated
as a distinct component, long-term loans (mortgages) came under one factor
with other loans and credits.
Table 4. Determinants of factors identified for borrowing behavior
Factor 1 Factor 2 Factor 3
Economic resourcefulness 0.172*** 0.188*** -0.176***
(variable imputed on the basis of SEM)
Total monthly net income of the household -0.056** -0.033 0.010
(in PLN)
Age (in years) 0.016*** 0.004 0.006
Constant -1.091*** -0.847*** 0.570**
2
Adjusted R 0.038 0.029 0.023
Note: *** p < 0.01, ** p < 0.05, * p < 0.10.
Having identified aspects of indebtedness, the second stage of the analysis
is an attempt to assess the significance of selected determinants. To the set of
analyzed determinants – as in the case of saving – economic resourcefulness,
age and income level were included. OLS regression results are presented in
Table 4. From the point of view of the considerations being made, the
dependence on the third of the analyzed variables – economic resourcefulness
– is of key importance. Obtained results clearly indicate the significance of
economic resourcefulness for all identified aspects of borrowing. However, it
is worth paying attention to the sign of estimates. Resourcefulness is positively
related to Factor 1 and Factor 2, and negatively to Factor 3. This means –

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