Choudhury, Samrana Noor2024-03-062024-03-062023-12https://unbscholar.lib.unb.ca/handle/1882/37745This study constructs a Financial Distress Index (FDI) for Canadian households and simultaneously examines its determinants using Statistics Canada's Survey of Financial Security (SFS) data (SFS 2019, SFS2016, SFS2012, SFS2005, and SFS1999). Employing Polychoric Principal Component Analysis (PPCA), we choose seven indicators to construct the index: debt-asset ratio, residence-ownership, RRSP withdrawal, bank saving, credit-card balance, payday loan, and stock-ownership. To find the drivers of financial distress, FDI is used as a continuous dependent variable in a fractional probit model. For robustness, marginal effects are estimated from a probit model. We find a higher consumer debt-to-total debt ratio, higher mortgage on principal residence, student loan debt, line of credit debt, and a larger family size contribute to financial distress. Conversely, higher education, greater income, more assets, and owning bonds, lessen the likelihood of distress. The study further sheds light on a comparative analysis of the financial distress across provinces and years.vii, 61electronicenhttp://purl.org/coar/access_right/c_abf2master reportChowdhury, MurshedEconomics