RDP 2019-06: The Effect of Mortgage Debt on Consumer Spending: Evidence from Household-level Data Appendix D: Variable Definitions
July 2019
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| Variable name | Definition |
|---|---|
| Age group – young | Dummy variable equal to 1 if the oldest person in the household is aged less than 30 years old, 0 otherwise |
| Age group – middle | Dummy variable equal to 1 if the oldest person in the household is aged over 30 years old and under 50 years old, 0 otherwise |
| Age group – old | Dummy variable equal to 1 if the oldest person in the household is aged over 50 years old, 0 otherwise |
| Employed | Dummy variable equal to 1 if household reference person is employed, 0 otherwise |
| Unemployed | Dummy variable equal to 1 if household reference person is unemployed, 0 otherwise |
| Not in the labour force | Dummy variable equal to 1 if household reference person is not in the labour force, 0 otherwise |
| Casual worker | Dummy variable equal to 1 if household reference person is a casual worker, 0 otherwise |
| Probability of losing job >0 | Dummy variable equal to 1 if maximum subjective probability of a worker within the household losing their job is greater than 0, 0 otherwise |
| Became unemployed | Dummy variable equal to 1 if household reference person became unemployed since last survey, 0 otherwise |
| Marital status | Dummy variable equal to 1 if household reference person is married or in a de facto relationship, 0 otherwise |
| Number of adults | Number of adults (≥15 years) in household |
| Number of children | Number of children (<15 years) in household |
| Education – high school | Dummy variable equal to 1 if household reference person's highest education attainment is year 10 or year 12, 0 otherwise |
| Education – TAFE/diploma | Dummy variable equal to 1 if household reference person's highest education attainment is a TAFE certificate or diploma, 0 otherwise |
| Education – university | Dummy variable equal to 1 if household reference person's highest education attainment is a bachelor degree or higher, 0 otherwise |
| Financial stress status | Dummy variable equal to 1 if household answered yes to any of the seven financial stress questions (see La Cava and Simon (2003)), 0 otherwise |
| Hand-to-mouth status | Dummy variable equal to 1 if household is classified as ‘hand-to-mouth’ (see KVW (2014)), 0 otherwise |
| Hand-to-mouth status (adjusted for prepayments) | Dummy variable equal to 1 if household is classified as ‘hand-to-mouth’ (see KVW (2014)) and adjusted for mortgage prepayments, 0 otherwise |
| Behind mortgage repayments | Dummy variable equal to 1 if household is behind or on schedule with their repayments, 0 otherwise |
| Gross household disposable income | Dollar value of annual, after-tax household income |
| Non-durables spending | Dollar value of all non-durable expenditure items collected by HILDA Survey (see footnote 4) |
| Durables spending | Dollar value of durable expenditure items collected by HILDA Survey (see footnote 4) |
| Total spending | Dollar value of durable and non-durable expenditure items collected by HILDA Survey (see footnote 4) |
| Mortgage debt | Dollar value of owner-occupier mortgage debt owed by household |
| Housing equity | Reported value of home less owner-occupier mortgage debt |
| Post-boom home purchase | Dummy variable equal to 1 if a household purchased their home after the early 2000s housing price boom in the state of purchase (after 2001 in NSW, Vic and Qld and after 2002 in all other states and territories), 0 otherwise |
| Mortgage debt-to-income ratio | Ratio of mortgage debt to gross household disposable income |
| Mortgage debt-servicing ratio | Ratio of mortgage repayments to gross household disposable income |
| Mortgage debt-to-assets ratio | Ratio of mortgage debt to reported value of home |
| Home value | Reported value of home |
| Prepayment buffer | Difference between scheduled (assuming a 25-year loan term) and actual mortgage balance |
| Global financial crisis | Dummy variable equal to 1 if the year is 2009, 0 otherwise |
| Local housing price shock | Dummy variable equal to 1 if annual average price of housing within postcode falls by more than 5 per cent, 0 otherwise |
| Local unemployment rate | Unemployment rate in ABS Statistical Area 4 |
| Local unemployment rate shock | Dummy variable equal to 1 if local unemployment rate increased by more than 1 percentage point over the year, 0 otherwise |