Consumer debt influence on life satisfaction : a South African study

Abstract

South African consumers are indebted, a status that is not unique to South Africa. Considering the negative impact debt may have on life satisfaction, it is in the interest of consumers and financial institutions that provide consumers with credit to understand such consequences. Of interest is the fact that consumers are not negatively impacted by debt due to having debt nor amount of debt owed, however, it is the perception of debt that influences how the consumer perceives their debt which then impacts life satisfaction. This study aimed to understand this phenomenon in the South African context, as most existing studies are in developed countries. A quantitative research methodology was undertaken to understand the relationship between these two constructs. The results suggest that South African consumers’ life satisfaction is not negatively influenced by debt overall. However, an investigation into the different types of debt held and investigation into the perception South Africans have relating to their debt portfolios, revealed that personal loans are the type of debt that impact the life satisfaction of consumers negatively. This study opens the platform to explore these constructs through future research preferably through longitudinal studies, to examine the relationship of consumer debt and life satisfaction in the South African context.