Author Identifier
Sharmeen Ara Rakhi: https://orcid.org/0000-0002-3259-2093
Date of Award
2025
Document Type
Thesis
Publisher
Edith Cowan University
Degree Name
Doctor of Philosophy
School
School of Business and Law
First Supervisor
Simone Scagnelli
Second Supervisor
Rashid Zaman
Abstract
Credit restoration has become an emerging issue in Australia, given the increasing number of consumers facing financial hardship. The Australian Government’s long-term objectives for strengthening the financial sector and improving or restoring its credit standing are aligned with this problem. Accordingly, this study analysed the impact of socioeconomic factors (age, gender, ethnicity, employment, education, income, and offence rate) and macroeconomic factors (GDP, inflation rate, Reserve Bank of Australia cash rate, and house price) on individual default. Additionally, the study utilised rental expenses and mortgage-payment expenses as moderating factors on the effects of socioeconomic and macroeconomic metrics on individual default. The study used secondary data from a credit-repair company (Credit Fix Solutions), the Australian Bureau of Statistics, and local government authorities in all Australian states. Ordinary least-squares regression was used to analyse the data, with quantile regression, hierarchical regression, logistic regression, and random-forest machine-learning approaches to check the robustness of the findings. The results revealed that the socioeconomic factors, ethnicity, employment, offence rate, inflation rate, and house price positively and significantly affected individual default, such that higher values of these factors lead to a greater risk of individual default. Conversely, higher income and Reserve Bank of Australia cash rates reduce default risk. It was found that both rental expenses and mortgage-repayment expenses positively moderated the effects of age, employment, offence rate, Reserve Bank of Australia cash rate, and housing price on individual default. The findings suggest that, regardless of the specific effects of socioeconomic and macroeconomic factors on individual default, both rental expenses and mortgage[1]repayment expenses lead these factors towards increasing individual default. By contrast, they negatively moderate the effect of income and inflation rate on individual default. The findings provide valuable insights that allow policymakers, government, and regulatory bodies to understand the predictors of defaulting behaviour and help them take necessary action to mitigate such behaviour. The study also paves the way for a new avenue of research for improving financial stability and enhancing the accuracy of predictive models for individual defaults.
DOI
10.25958/0qgg-5c59
Access Note
Access to this thesis is embargoed until 30th August 2028
Recommended Citation
Rakhi, S. A. (2025). An analysis of the impact of socioeconomic and macroeconomic factors on individual default. Edith Cowan University. https://doi.org/10.25958/0qgg-5c59