Local Economic Inequality and Household Borrowing in the UK

Online - hosted via Zoom
Monday 5 June 2023 (13:00-14:00)

Helen Harris


Recent work using US data suggests that lower income households borrow less under conditions of greater inequality. Dr Joel Suss (Bank of England; London School of Economics) is the guest speaker at this CHASM seminar.

Dr Joel Suss investigates the relationship between local economic inequality and household borrowing using the UK's Wealth and Assets Survey data and granular, neighbourhood-level estimates of economic inequality.

Using this unique data, I find the opposite of what has been previously reported. Lower income households borrow more and are under greater financial distress, both objectively and subjectively, when local inequality is higher. This result can be explained by both demand and supply drivers – credit conditions are looser and, in line with social comparison theories of household spending and consumption behaviour, demand for credit is greater for lower income households in areas with greater inequality.


Dr Joel Suss is a Research Data Scientist in the Advanced Analytics Division at the Bank of England and a Visiting Fellow at the London School of Economics, jointly appointed by the International Inequalities Institute and Centre for Analysis of Social Exclusion (CASE). His work uses large datasets and computational methods to measure economic inequality at granular spatial levels. For example, a recent paper estimates inequality at the neighbourhood level in the UK using housing value information (see also the interactive map). Using local measures to better approximate how inequality is experienced, Joel’s research explores the consequences of economic inequality for important social and economic behaviours. His study (co-authored with Thiago R. Oliveira) provides evidence of a link between neighbourhood inequality in London and the volume of police stop and search activity. 

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