The simultaneous use of formal and informal credit and dissaving: Exploring the financial behavior of households in Argentina

Working papers | 2011 | N 51

Abstract

As a generator and promoter of public policies aimed at promoting the process of financial inclusion, the Central Bank of the Argentine Republic makes periodic efforts to measure, study and analyze the access and use of financial services by households in Argentina. It is, in this way, the main objective of this document to take advantage of the richness of information from the Permanent Household Survey to explore the simultaneous use of formal, informal and dissaving credit as part of families' life strategies, in an attempt to understand the determinants of household financial behavior. Using multivariate probit models, we document the effects of different economic and sociodemographic variables on the estimated probability of adopting certain financial behaviors. These types of models also allow us to analyze in a statistically appropriate way the simultaneous determination of actions observed in the financial management of households. Thus, controlling for the set of exogenous variables and adding the variables explained as endogenous regressors, it is shown that the inclusion of these is both statistically relevant and useful to identify the existence of substitutability between some household financial behaviors and complementarity among others.

JEL classification: C6, G10, R21