A Review of Consumers’ Over-Indebtedness: Definitions, Determinants, and Measurement Approaches

Abstract

Over-indebtedness is one of the biggest challenges in the modern world. While there is a growing global concern about consumer over-indebtedness, research remains limited and inconsistent in defining and measuring this condition. This review critically analyzes the various definitions and measurement approaches of over-indebtedness, identifying conceptual gaps and methodological limitations in objective, subjective, and administrative models. The paper concludes by advocating for a borrower-centric measurement framework, particularly the 'sacrifice-based' approach proposed by Schicks (2014), which offers a more holistic and accurate understanding of the over-indebtedness condition. The review highlights that adopting such frameworks will enable future researchers and policymakers to design more effective interventions and solutions to mitigate over-indebtedness challenges.