Abstract
This article offers an explanation for the wide spatial variations in choice of insolvency route by personal debtors across local authorities in England and Wales. It is argued that formal bankruptcy has a more negative impact on social capital through stigma effects than the alternative of Individual Voluntary Arrangements. Consequently, spatial variations in choices are related to variations in social capital. The hypotheses derived from this approach are tested through the use of spatial econometric models utilising data from England and Wales. The results provide support for a positive link between variables related to social capital (age, mobility and home ownership) and choice of IVAs. It is argued that avoidance of stigma costs provides an explanation for the apparent paradox of the significant growth of IVAs despite their high cost to debtors compared to bankruptcy. Whilst there is only limited support for impacts directly related to the urban-rural environment, significant spatial interdependencies in choices across neighbouring areas are also uncovered.
DOI
10.1177/0042098016679765
Publication Date
2016-12-06
Publication Title
Urban Studies
Publisher
SAGE Publications
Embargo Period
2024-11-19
Recommended Citation
Bishop, P. (2016) 'Spatial variations in personal insolvency choices: the role of stigma and social capital', Urban Studies, . SAGE Publications: Available at: https://doi.org/10.1177/0042098016679765
