6.2  The likelihood of having liabilities

This logistic model should be considered in conjunction with the regression of the logarithm of total liabilities. It is expected that we will see most variables to have the same direction in both models (the level of total liabilities held should move with the likelihood of holding liabilities).

An individual's geographic region, having children over the age of five and receiving a benefit were the only descriptors that were not significant at the 10% level. A member of the longitudinal population with mean characteristics has an 83.4% chance of having liabilities. The likelihood of having liabilities increases until people are about 40 years of age and decreases from 40 onwards. By the age of 80 there is just more than a 15% chance of having liabilities at the mean.

To provide some context for the results below it is useful to know that having a university qualification increases the likelihood of having liabilities by 6.7 percentage points. Being moderately to heavily deprived (median to worst categories) are associated with a 3.7 to 4.4 percentage point increase in the likelihood of having liabilities. The logistic model, before the inclusion of health descriptors, can be found in Appendix C, Appendix Table 22.

The health descriptors were included in this logistic model in the same form as they are found in the core models.

Table 12 gives the coefficients and percentage point effects from these regressions. Percentage point effects for the health variables should be used for comparison as the coefficients are not directly comparable.

All significant health variables have positive coefficients. Only high physical discomfort and the chronic conditions (excluding stroke) appear to have a significant effect on whether a person has liabilities or not and all are associated with an increase in the likelihood of having liabilities.

Of the health descriptors, migraines have the greatest percentage point effect of 3.44. This effect is smaller than those associated with ethnicity, education, deprivation and family composition and is relatively minor compared to the 83.4% probability of having liabilities at the mean. Ageing from 25 to 27 has the same percentage point increase on the likelihood of having liabilities as migraines. Ageing from 56 to 58 has the reverse percentage point effect of being diagnosed with migraines.

The weak association between health and whether a member of the longitudinal population is in debt may be owing to when they enter into debt and when their health begins to deteriorate. Individuals with ill health may be less inclined to enter into debt, while healthy individuals may enter into debt and later find their health deteriorating. The logistic model will be unable to detect this as it is based on cross-section data.

Source: SoFIE Waves 1–3, OSMs, longitudinal weights, supplied by Statistics New Zealand

Notes:

1. *=significant at the 10% significance level. **=significant at the 5% significance level. ***=significant at the 1% significance level.
2. Percentage point changes are calculated as the increase in percentage points of the probability to have zero liabilities for a change in the variable with all other variables held at their mean. For categorical variables this is a change from the control.