Analysis of Consumer Credit Card Debt and its Impact on Financial Stress

Background

This assessment uses the same data as PST1. Consumer debt has been a major topic of discussion in Australia over the last few years. From the Banking Royal Commission in 2017 through to the current Cost of Living crisis questions are being posed regarding issues surrounding consumer indebtedness and their ability to pay.

You have been given information on 9 variables for a series of credit card holders. In addition to their customer number you have been provided:

1. Balance – the average monthly unpaid credit card balance ($)
2. Income – the average monthly household income from all sources ($)
3. Spend – average amount spent using the credit card per month ($)
4. Loans – the average amount paid servicing other loans per month ($)
5. Card – level of card issued (Blue for lowest level, Gold for mid tier and Platinum highest)
6. Gender – gender of the card holder restricted to Male or Female
7. Status – household income arrangements defined as couple or single income earner
8. Children – Number of children in home
9. Education – highest level of education of card owner (High School, Diploma, Bachelor or Postgraduate)

Your Task

1. For the Balance variable calculate the full range of statistics including Mean, Median, Mode, First and Third Quartiles, Standard Deviation, Range, Interquartile Range and Skewness Coefficient. Copy all of these measures to your answer document
2. Recreate the Histogram from last assessment and also do a Box and Whisker Plot for the Balance Variable. Make sure all diagrams are labelled and copy to your answer document.
3. In less than 100 words describe the variable Balance and indicate if you think that overall unpaid credit card debt is a problem.
4. Split the Balance Data in to two groups – For those customers who have other loan repayments and those who do not. Calculate the full range of statistics for both groups including a coefficient of variation. Do Box-Plots for both groups.
5. In less than 100 words what can you conclude about credit card debt when comparing the two groups?
6. Recreate the Debt Stress Index Variable from PST1
7. g.Using just the four variables: DSI, Balance, Loans and Spend, construct a correlation matrix showing the relationship between them. This can be done using the Data / Data Analysis / Correlation function in Excel. Copy the results to your answer document.
   h.
8. In less than 100 words what can you say about the relationship between Debt Stress and the three variables Balance, Loans and Spend. Don’t just define the values, tell us what you have learned.

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