In this article we perform a comparative analysis of the self-reported perception of
the housing cost burden as an indicator of potential financial distress. We employ
EU-SILC data on five European countries – France, Germany, Italy, Spain and the
UK – for years from 2005 to 2010. Wide differences emerge between Germany,
France and the UK on the one hand, and Italy and Spain on the other. Estimation of
the housing cost burden by means of logit models allows us to relate the probability
of a high burden to both micro and macro-economic variables and to identify
differences among countries. As for socio-economic variables, our results reveal the
existence of life-cycle effects and a lower burden for homeowners. As for aggregate
variables, GDP growth and higher consumer confidence contribute to reducing the
probability of a high burden, whereas high levels of unemployment and inequality
contribute to increase it. At country level, we observe differences in the size of the
impact of the explanatory variables on the probability of perceiving a high burden,
especially for covariates such as age, homeownership status and education.
JEL classification numbers: D12, D14, C25.
Keywords: Housing cost burden, Perceived financial distress, Logit models,
EU-SILC.
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