**1. Introduction**

The paper is an attempt to contribute to evaluating the macro- and micro-economic factors affecting the financial energy of households. Conceptualizing the term "financial energy of households," the author of this research aimed to capture the broad aspects of households' financial standing and the factors directly and indirectly affecting consumers' solvency. The paper is an investigation of the links between the economic and social factors determining households' financial situations and their vulnerability to changes in the macro-economic situation of their country.

It is important to study the vulnerabilities of the household sector for at least two reasons. First, the household sector holds the largest share of wealth in developed economies. As wealth is one of the most important factors in determining a household's consumption patterns throughout its lifecycle, the consumption decisions of households are influenced by their degree of solvency, thereby impacting overall economic activity. Second, vulnerable households pose a threat to a country's financial stability due to their tenuous ties to financial institutions [1].

The financial crisis from 2007–2012 and the current global coronavirus pandemic have dramatically increased the risk of consumer insolvencies throughout the world. Many households are reporting financial distress and feel constrained by debt repayment obligations. Financial distress is a state in which an individual is unable to maintain their customary standard of living [2,3]. This means that anyone, regardless of wealth or level of education, can become financially vulnerable. While there are extensive studies on the effects of gender, level of education, age, and cultural background on consumers' financial decisions [4–10], households' level of financial distress and the factors affecting it have received little attention. Therefore, the author of this study formulated three research questions:


**Citation:** Korol, T. Evaluation of the Macro- and Micro-Economic Factors Affecting the Financial Energy of Households. *Energies* **2021**, *14*, 3512. https://doi.org/10.3390/en14123512

Academic Editor: Wen-Hsien Tsai

Received: 25 May 2021 Accepted: 10 June 2021 Published: 13 June 2021

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**Copyright:** © 2021 by the author. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

• Is fuzzy logic an effective technique to forecast the changes in the macro-economic risk of nonperforming household loans?

Thus, the contribution of this paper complements the existing literature in an important fourfold manner. First, it is an evaluation of the micro-economic, macro-economic, and social factors affecting households' risk of insolvency. Second, the four most common consumer profiles from the perspective of the factors determining financial vulnerability are identified. Third, the influence of specific macro-economic variables on the volume of personal bankruptcies within a country is identified. Fourth, a fuzzy logic model is proposed for forecasting changes in the macro-economic risk of nonperforming household loans.

This research should enable scholars to better situate the phenomenon of consumer bankruptcies within the literature. It should also result in a better understanding of the process of becoming insolvent, and it includes practical solutions for identifying the volume of household bankruptcies while considering the macro-economic, micro-economic, and social factors affecting the phenomenon.

Scientifically, the term "bankruptcy", which has a pejorative connotation, can be replaced by terms such as "insolvency" and "low financial energy." During the last two decades, personal bankruptcies have become increasingly central to debates on poverty, inequality, and quality of life. Consumption, income, and wealth are three main measures of a household's economic situation and reflect the stability and strength of its finances. The advantage of using the consumption measure is that it not only captures the objective aspects of a household's economic condition but also involves a social and comparative component, which accounts for deprivation that is disproportionate to resources [11]. In turn, consumers' income directly affects their purchasing power and determines their creditworthiness, which indirectly influences their consumption choices. For many individuals, taking out a bank loan may be the only way to afford a house, car, or other amenities that are vital for a person's welfare. Therefore, consumers' consumption decisions are influenced by their households' degree of solvency. Such a multidimensional understanding of the financial energy of households fully reflects the economic resources of income and wealth along with the resources available for consumption under specific cultural and socio-economic conditions.

Besides micro-economic variables, the macro-economic and social factors affecting households' financial energy and the overall scale of bankruptcies within a country's economy are examined. The macro-economic environment influences the availability of loans and their cost to households, the degree of prosperity of consumers, and the stability of the labor market, which affects consumers' earnings prospects. Therefore, in this research, variables such as the unemployment rate, inflation rate, growth rate of the GDP, and interest rates are identified. In the case of social factors, there are two dimensions—objective and subjective. Among the subjective factors, we can identify a consumer's level of awareness of their financial vulnerability, the degree to which they pay attention to their finances, their level of self-control, and their degree of impatience within the context of a materialistic culture. These factors can be used to predict a person's pursuit of possessions and material goods in the hope of reaching a desired state [12]. Materialists believe that the acquisition of material goods is a prime indicator of success and a key to self-definition, happiness, and the achievement of life goals [13]. Among the objective variables, we can identify one's level of education, the condition of one's health, and even the possession of retirement investments and plans as influential.

This paper consists of five sections. In the introduction, the author provides the basis for exploring the topic, the study's objectives, and the study's contributions and innovations to the literature. Section 2 is a literature review covering the causes of household insolvency in various countries, including the USA, Malaysia, the UK, Lithuania, the Czech Republic, Germany, and Chile. Section 3 is an introduction to this study's assumptions. In Section 4, the author presents the conceptual framework for evaluating the risk factors for insolvency, and a forecasting model is constructed. Section 5 is the conclusion, with implications for policy-making efforts and future research.
