Overspending of Wage-earner Households in Korea -Application of Financial Analysis-

Original Article

Journal of the Korean Home Economics Association 1996;34(5):209-222.

논문편 : 한국 도시근로자가계의 과소비와 영향변수 - 재정비율분석을 중심으로 -

박명희

동국대학교 가정교육과

Overspending of Wage-earner Households in Korea -Application of Financial Analysis-

박명희

ABSTRACT

The purpose of this study is to apply ratio analysis, which indicates the rate of income to total expenditure, to examine wage-earners' overspending in Korea. We use the Family Income and Expenditure Survey produced by National Statistical Office Republic of Korea and total sample size is 40,691 including households complete income reported. Through the t-test, among 17 expenditure categories, overspenders is likely to spend more on housing, apparel, medical, education, and leisure expenditures more than non-overspenders significantly. Interestingly, overspenders have more income, but less financial assets than non-overspenders. To analyze the effect of socio-demographic variables on overspending, ordinary least square is utilized. The results shows that the more educated, larger family size, and older consumer tend to overspend. The results of study are leaded into two aspects. First, overspending can be solved by consumer education with efficient financial management practice. Second, overspending may be not solved unless policies in various ways enhance the overall quality of living to lessen each household's budget constraints.