Bad mortgage loans and rampant consumer debt were two of the primary causes for the recent economic recession in the U.S. Despite a national trend of debt problems, a University of Missouri researcher has found one American population that holds almost no consumer debt outside of typical home mortgages.
Rui Yao, an assistant professor of personal financial planning in the College of Human Environmental Sciences at the University of Missouri, found that while 72 percent of Chinese-American households hold a mortgage, only five percent of those households have outstanding auto loans, and only three percent have any other type of consumer debt.
In her study, Yao surveyed Chinese-American households in ten Midwestern cities. Income levels of participants ranged from $4,000 to $1.4 million annually with an average income of $106,000. She found that despite a low overall rate of debt, Chinese-American households with higher incomes were more likely to have some type of consumer debt.
“This result may reflect some unique aspects of the Chinese culture,” Yao said. “Credit and debt are relatively new concepts to the Chinese. Having ties to a country where most purchases are made with cash, debt may not be an acceptable option for low- income households that are aware that debt needs to be repaid with interest in the future. It may also be that high levels of debt for those with relatively higher income reflect relatively higher mortgage balances.”
Yao says that while the Chinese-American population is the largest Asian-American group in the U.S., many have little experience in the American economy. She believes Chinese Americans could benefit from financial education designed to help them plan for their financial future in a manner consistent with Chinese cultural values. Yao believes encouraging Chinese Americans to take advantage of debt in a responsible fashion is important for the entire U.S. economy.
“The historic aversion of the Chinese to debt could be both a strength and a weakness in the U.S. economy,” Yao said. “It is a strength because it enables them to build a strong financial base that is not threatened by excessive amounts of consumer debt or subject to loss in uncertain financial times. However, it may be a weakness if it limits consumption. Appropriate use of debt can help households improve their quality of life as well as spur economic growth through an increase in market purchases. At the same time, excessive debt can become a financial burden to households and lenders, as proven by the recent sub-prime lending crisis.”
This study was published in the Journal of Family Economic Issues.
Nathan Hurst | EurekAlert!
Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)
Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.
As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...
Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.
Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...
For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.
While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...
An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.
The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...
A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.
Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...
16.08.2017 | Event News
04.08.2017 | Event News
26.07.2017 | Event News
21.08.2017 | Medical Engineering
21.08.2017 | Materials Sciences
21.08.2017 | Life Sciences