Herceg, Ivana creator Nestić, Danijel text au Wien Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw) 2012 monographic eng

print

This paper proposes a new approach to household financial vulnerability analysis by employing cluster analysis techniques in the identification of potentially vulnerable households. The cluster-based vulnerability indicator is combined with a binary dependant variable model and used in stress testing. The proposed methodology is applied to householdlevel data for a post-socialist economy – that of Croatia – with the specific aim of testing the extent to which the prolonged economic downturn following the Great Recession of 2008-2009 might hurt indebted households. The paper compares the results based on the new approach with those based on traditional stress testing methods. Interest rate shocks had a stronger impact on household vulnerability in the traditional approach, whereas decreases in employment are found to be more disruptive in the cluster-based approach. household financial vulnerability cluster analysis stress testing Croatia Croatia https://wiiw.ac.at/p-3194.html https://wiiw.ac.at/p-3194.html 121123 20260518120109.0 pwiiw3194