Ratio of consumer liabilities to consumer financial assets

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The ratio of consumer liabilities to consumer financial assets rose from just over 10% in 1950 to more than 30% in 2009. However, recent researches points to a number of factors that bear on the consumer’s decision of when and how much to borrow. Leading the list is the size of individual income, meaning that families with larger incomes tend to use greater amount of debt.

How do you justify this positive debt-income relationship using a regression concept? Please be specific.

Reference no: EM13983896

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