Income poverty: Household expenses and indebtedness in European countries

Complex studies on the theoretical, methodological and empirical issues of income poverty in relation to household expenses and liabilities are generally lacking in European research. The missing dimensions of housing costs, regular expenditures and debt payments in income-based measures can distort the overall picture as income itself fails to properly identify populations in financial stress. This research will focus on how and why people become overburdened by expenses and over-indebted, and how their welfare is affected. The work will provide an enriched and broader view of the economics of poverty. Empirical findings will be demonstrated in the context of East-West European differences in economic and social standards. The recent pandemic and energy crises as well as growing inflation pressures are causing serious economic strains in households. The current situation intensifies the need to better understand the interlinks among household income, housing costs and expenses, (over-)indebtedness and well-being. 

The research enriches current knowledge in the income poverty field by considering household expenses and indebtedness. These facets of income poverty will be analysed in the context of East-West European differences.

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In the first year of the project, the topics of household expenditures and household debt and savings have been explored. Using Czech data, the role of food and housing expenditures in households’ economic well-being have been examined, while the relationship between housing financial strain and households' financial well-being has been compared internationally. Household indebtedness, or more precisely, household 'over-indebtedness', measured by subjective and objective approaches, has been also examined from an international perspective. In contrast, the determinants of household precautionary savings has been examined in the Czech environment.