The Risks of Gaining and Losing from Debt According to the Perspective of Men and Women

Debt is a financial service frequently offered by financial institutions. However, decision to be in debt bear risks. According to the prospect theory, when a person is faced with a risk, they will consider the potential gains and losses. Thus, this research was conducted to explore perceptions regarding the gains and losses of incurring debt among men and women. This study involved 94 respondents, consisting of 35 men and 59 women. All respondents filled out open questions regarding the benefits and drawbacks of owing debt. This study utilized grounded theory and qualitative survey methods. Grounded theory was used to conduct axial coding in arranging response categories, while the qualitative survey was used to identify the diversity of respondents’ characteristics. From the result of the analysis, the gain and losses of incurring debt were obtained. The response of women who mentioned the gains of debt had a higher percentage than that of men. Meanwhile, the percentage of men who saw debt as a mean to meet basic needs was higher than that of women. On the other hand, the result showed that there were two types of negative perceptions that formed towards debt, namely psychological loss and financial loss.


Introduction
Over the last twenty years, debt has been a source of financial funding in the household economy. The development of debt market, aggressive debt marketing, ease of accessibility to debt products, as well as a positive consumer attitude on the contribution of debt towards the growth of debt use (Raijas, Lehtinen & Leskinen, 2010). Debt is defined as a loan of a sum of money from a bank, accompanied by an agreement on the interest and the duration of repayment time (van Raaij, 2016).
Consumer debt is defined as a loan from a bank or other financial institutions who act as a lender. The loan is accompanied by a contract to repay the borrowed money along with a fixed amount of interest, paid in monthly installments, within a set duration of time (van Raaij, 2016). In any case, where the customer or client cannot pay off the debt, the lender confiscates and sells the agreed collateral in order to gain back the money borrowed.
Debt can be utilized to generate investment income as well as for consumption. Debt for investment occurs when debt is used to buy shares or used to carry out activities that generate profits. The profit is subsequently used to pay off the debt. Meanwhile, the use of debt to buy longterm goods that are not for investment is called consumption debt (van Raaij, 2016).
There are several types of debt costumers according to van Raaij (2016), namely: Student who borrow money to pay for tuition, books, clothing and accommodation; individuals who take out loans to build a house (mortgage); individuals taking out personal loan with fixed interest; credit cards; and debt in the form of credit instalments such as to buy a car.
• Men see debt as an alternative to fulfil needs.
• Women see debt to ease financial allocations management such as investment allocation, the speed of obtaining desired/needed goods, and ease of taking out a loan as well as becoming a financial solution.
• Two perspective of debt loss are financial loss and conditions of psychological loss.
• Financial losses are felt more by women.
• When men burden to pay off the debt they experience negative emotions Based on its objectives, there are three types of debt, namely productive, consumer and trade debt. Productive debt is a loan used to produce goods and services. Consumptive debt is loan consumed personally, such as for rent, housing, and home furniture. Trade debt is defined as debt used to buy trade commodity. The profit earned from the sale of these commodities is used to pay off the debt (Kasmir, 2010). The focus of this research is consumer debt.
According to the life-cycle theory of consumption (Modigliani & Brumberg, 1954), people must borrow to maximize the utility of their life cycle as a whole. Debt increases with age until the age of 40, then begins to decline. Subsequently, debt is also related to marriage because of the emergence of needs that require large funds after marriage. Also, the presence of children is also a factor that adds to the list of necessities. The use of debt is divided into two, namely to the maintenance of lifestyle and improvement of lifestyle (Norton, 1993). Customers who have financial difficulties will tend to incur debt. Meanwhile, customers with better economic conditions and materialistic tendencies will take out a loan or incur debt to meet their consumer needs.
Debt decision making is categorized as intertemporal decision making. Customers agree to borrow money now and pay it off later. When someone owes a debt, an agreement is made between the customer and the lender about the number of installments, time and interest (Ranyard, McHugh & McNair, 2018).
Debt decision making through three stages (Kamleitner & Kirchler, 2007). The first stage is the process of identifying needs leading to information-seeking before taking out a loan. The second stage is the process of selecting the type of debt instrument. The last step is the debt payment strategy.
In the first stage, prospective customers decide whether to borrow, delay purchases or use existing savings to buy a particular product or service. In the second stage, the customer evaluates and decides on several attributes such as the amount of loans, which lenders, the fees, loan security, fixed or continuous debt installments and the level of payment and duration of payment. The third stage is the stage where the customer repays the debt.
In the process of making debt decisions, customers are faced with a variety of choices that contain risks. Risk itself is associated with profit/gains) and losses. According to the prospect theory, a person's primary motivation in behaving is to avoid loss aversion and gain seeking, where avoiding loss is a stronger motivation than seeking profit. This is because losing is valued twice as more negative than the positive value when obtaining an equivalent profit (van Raaij, 2016).
Meanwhile, when faced with the probability of making a profit, an individual tends to take risks (risk-seeking).
According to the prospect theory, a person's preference depends on the framing of the choices available. In an uncertain situation, someone will tend to choose a choice that has a large expected utility. In addition to the framing of choices, a person also performs mental accounting where an individual frames the consequences of his choices (Kahneman, 2003).
Financial markets such as stock market and debt market involve a process of rational valuation and decision making (Gärling, Kirchler, Lewis & van Raaij, 2009). Debt decision making pertains risky decision making because customers will face severe and long-term consequences. During the repayment process, customers will experience uncertainty.
On an individual level, risk-taking is domain-specific. For example, when an individual takes a risk in the financial domain, there will not exist or have a shallow relationship with risktaking on other domains such as the social domain (Weber, Blais & Betz, 2002). Research by Weber et al. (2002) shows that risk-taking is mediated by risk perception, risk attitude and risk propensity.
This risk-taking behavior can be explained through prospect theory (Kahneman & Tversky, 1979). According to prospect theory, decision making involves the function of values, namely valuation of gains and losses. The value of a loss weighs higher than the value of gains. Conversely, the value of gaining something weighs less than when losing something. For example, the loss of one million rupiah weighs more significant loss than the weight of happiness when receiving one million rupiah. Thus, whether someone will take risks (risk taking) or avoid risk (risk averse) can be explained through the function of profit and loss.
Previous studies have examined the influence of gender on financial behavior. In regards to the perception of financial situations, there are no differences between men and women in looking at the past, current and future projections of financial situation. However, there are differences in some aspects of financial satisfaction between men and women. In regards to saving aspects, women convey that they are more satisfied than men. On the other hand, men are more satisfied than women when they can fulfill long-term goals and emergency needs (Hira, Tahira & Mugenda, 2000). From a risk standpoint, men and women are different when making financial decisions. Men tend to take risks when faced with gains while women will choose to take risks when faced with losses (Schubert, Brown, Gysler & Brachinger, 1999).
Risk taking can be maladaptive and adaptive. It is considered maladaptive if the potential profit is smaller than the potential loss. Likewise, it is adaptive if the potential benefits outweigh the disadvantages (Byrnes, Miller & Schafer, 1999). An individual is not necessarily considered successful in adapting when they manage to avoid risks. However, they will take into account which risk of success should be pursued and which risk of losses should be avoided.
In financial behavior, risk plays an important role. Men and women have different debt decision-making strategies. Women tend to avoid risk. Meanwhile, men try to earn big profits and tend to choose to face risks. Financial decision making for men is driven by the desire for achievement, investment, promotion and is success-oriented. For women, financial decision making is driven by loss aversion and is oriented towards communication and harmony (van Raaij, 2016).
Based on the explanation above, this research was conducted to understand what is perceived as the gains and losses of debt according to men and women. It is hoped that this research can be useful for financial consultants in helping clients recognize the risk of profit and loss of debt so they can make appropriate financial decisions. The research question is: What are the risks of gaining and losing from debt according to men and women? 2. Method

Participants
The data collection was carried out using purposive sampling. The respondent was selected based on the criteria of having been or currently in debt, where the loan is used for consumption. The results of the data collection indicate that 102 respondents filled out the survey. However, after checking the respondents' answers, only 94 participants adhered to the respondent selection criteria. Eight respondents were considered irrelevant due to taking out a loan for business capital purposes. Based on gender, respondents consisted of 59 women and 35 men. The age range of participants is between 21 to 60 years.

Instruments
The instrument of this study consists of two parts, namely demographic data and open-ended questions that inquire the respondent's opinion of the benefits and losses of incurring debt (taking out a loan). Based on a survey conducted by We Are Social, in 2018, 132.7 million Indonesians were internet users, 177.9 million used some form of electronic devices and 130 million were users of social media. To send messages, as many as 40% of social media users used the Whatsapp application. Based on these considerations, researchers conducted an online data retrieval through the Whatsapp application. The duration of data collection was two weeks.

Data analysis
There are several stages of qualitative data analysis according to Hayes (2000): (1) data preparation for the analysis, (2) identification of specific information from the responses, (3) categorizing data/responses based on appropriate themes, (4) checking themes and defining definitions, (5) re-checking the theme that has been created based on the categorization of the data/responses, and (6) utilization of all references or materials related to the theme in order to arrange a construct that contains the category.
The grounded theory approach was then used to construct a conceptual coding of empirical indicators derived from participant responses (Strauss, 2003). The researchers of this study then performed axial coding. From the response that emerged from the coding, the researcher then composed the categories. Axial coding itself is defined as cumulative knowledge that arises from relationships between categories as well as the relationship between categories and sub-categories (Strauss, 2003). Axial coding was done in two response groups that is the response regarding the gains and the losses of debt. In conducting the coding, researchers of this study used the MAXQDA program. A qualitative survey was conducted to analyze the diversity of characteristics of respondents (Jansen, 2010). In this study, researchers looked at the diversity of risks of gains and losses in incurring debt based on gender.

Demographic data
The results of the statistical analysis show the participants' demographics as follows:

Result analysis of debt gains
The analysis shows that from 94 respondents, 83 responses were obtained from the question regarding the debt gains. These responses then form five bigger categories, that is: "fulfilling needs," "financial solution," "ease of taking out a loan," "quick acquirement of desired/needed goods" and "buying investment goods." The "fulfilling needs" category can be explained as the use of debt to meet needs. Needs here refers to necessities that must be met right away. Some example of the respondents' responses is: "assistance in an emergency," "can be used during a sudden situation," "urgent needs can be fulfilled," and "help to pay for something important." The "financial solution" category can be explained as the use of debt as a way to resolve temporary financial problems. Some example of the respondents' responses is: "problems solved temporarily," "getting bailouts," and "short-term financial solutions." The "ease of taking out a loan" category contains three elements -first, an easy procedure to obtain for funds. Examples of the respondents' responses are: "instant funding" and "quick way to acquire funds." Second, the ease of repayment due to the option of paying in instalments. Examples of the respondents' responses are: "can be paid in instalments," and "can be repaid little by little (while the rest of the money is used) for necessities." Third, the gains that take the form of discounts when making a purchase using instalments/credit cards. Examples of the respondents' responses are: "there is a discount" and "there are promotions that are more economical." Debt is useful to help customers quickly acquire goods they want or need. Examples of the respondents' responses are: "getting the desired good quickly," "can have something quickly," and "get what we want quickly." Buying investment goods is defined as debt that can be used to buy goods of a longterm nature, such as property. Examples of the respondents' responses are: "the purchase of high price goods is easier," "for future investments" and "can have a home by paying in instalments." The highest percentage of response for both men and women in the category of "quick acquirement of desired/needed goods," amounting to 26.51% (22 responses). "Financial solutions" and "fulfilling needs" amounted to the same amount of percentage at 25.30% or 21 responses each. It is then followed by "ease of taking out a loan" at 14.46% (12 responses). The lowest percentage is "buying investment goods" at 8.43% (7 responses).

Graph 2. Percentage of debt gains responses in the male respondent group
For the male respondent group, the response with the highest percentage was "fulfilling needs" at 33.33% (11 responses), followed by "financial solution" at 27.27% (9 responses) and "quick acquirement of desired/needed goods" at 21.21% (7 responses). The "ease of taking out a loan" category amounted 15.15% (5 responses). The category with the lowest percentage is "buying investment goods" at 3.03% (1 response). As seen in Graph 3, the category that has the highest percentage of response is "quick acquirement of desired/needed goods" at 30% (15 responses), followed by "financial solution" at 24% (12 responses), "fulfilling needs" at 20% (10 responses), and "ease of taking out a loan" at 14% (7 responses). The category with the lowest percentage is "buying investment goods" which amounted for 12% (6 responses).

Graph 4. Comparison between men and women in the percentage of debt gain responses
Graph 4 compares the percentage of responses of both male and female respondents. For the category of "buying investment goods," "quick acquirement of desired/needed goods," "ease of taking out a loan" and "financial solutions," the percentage of women's responses is higher than that of men. The percentage of women's responses in the "buying investment goods" category was 86% while the percentage of men's responses was 14%. In the category of "quick acquirement of desired/needed goods," the percentage of women's responses reached 68%, while men's responses were at 32%. The percentage of women's responses to "financial solutions" reached 57%, whereas the percentage of men responses is 43%. Meanwhile, the percentage of men who see debt as a means to fulfill needs is higher than women at 52%, which was only 48% for women. From the 94 respondents, 79 responses were acquired from the question regarding debt loss. The result analysis of the responses produced seven categories of losses that based on the perception of respondents. The seven categories are grouped into two broader categories, namely "risk of financial loss" and "risk of psychological loss." Forty-four responses were grouped into the "risk of financial loss" category. Thirty-five responses were grouped into the "risk of psychological loss" category.
The "risk of financial loss" category includes "high-interest rates", "decrease of future financial allocation", and "consequences that emerge due to late payments". The "risk of psychological loss" consists of "negative emotions", "bound to installments", "usury", and "vulnerability to consumptive behavior".
Interest is defined as a return or compensation for the use of a borrowed money of which the amount is agreed upon between the lender and the recipient of the debt. High interest is considered as the risk of losses that must be paid when taking out a loan. Some example of the response is: "the interest is enormous," "the debt interest multiplies" and "repayments become more expensive." Another financial risk is the decrease of future financial allocations. This occurs due to future financial allocations being used to pay current instalments and interest. Some of the responses are: "reduces future income," "reduces savings" and "reduces future finance." The last financial risk is the consequences of late payment, that is, paying a fine. Examples of responses are: "(I) incur losses for unpaid bills (that pile up)" and "(I) incur losses when (I am not) able to pay." The risk of psychological loss consists of negative emotions, being bound to installments, as well as usury and vulnerability to consumptive behavior. Negative emotions are defined as feelings of discomfort caused by debt ownership. Feelings of discomfort can take the form of shame, unsettled feelings, and moral burden. Examples of responses to uncomfortable feelings are: such as "does not feel good," "living with unsettled feelings," and "can't sleep well because (I) have not yet paid off (the debt)". Whereas examples of responses to moral burdens are: "moral burden" and "It's a waste because if (someone is) expose to usury, the punishment (from God) is not only wordy punishment (i.e. being chased by debt collector), but (the person will) also experience punishment in the afterlife (hell)" The second category of risk of psychological loss is being bound to installments, which means that there is a burden to pay monthly installments within a certain duration. Examples of responses are: "(duration of) installment plan is too long," "long periods of time," "paying monthly installments," "lose time to pay off all that (debt)." Next is the vulnerability to consumptive behavior. The availability of debt facilities to quickly and easily acquire money makes respondents feel vulnerable to consumptive behavior. Example responses from the respondents are: "It is difficult not to refrain from buying," "become consumptive" and "unconscious of all the plenty installments (that should be paid)." Overall, the category with the highest percentage is "high interest" at 37% (29 responses), followed by "negative emotions" at 20% (16 responses), "future financial allocations" at 15% (12 responses), "bounded to installments" at 14% (11 responses), and vulnerability to consumptive behavior at 5% (6 responses). The category with the lowest percentage is the "consequences of late payment" at 4% (3 responses).

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The following is a graph of the percentage of the response categories:

Graph 5. Risk of debt losses
In the male respondent group, the risk of financial debt loss with the highest percentage is "high interest" at 53% (8 responses), followed by "reduction of future financial allocations" at 40% (6 responses). The category with the lowest percentage is the "consequences of late payment" at 7% (1 response). The female respondent group also showed the same pattern. The category with the highest risk percentage is "high interest" at 72% (21 responses), followed by "future financial allocations" at 21% (6 responses) and "consequences of late payment" at 7% (2 responses). Below is a graph of the percentage of each response based on the two gender groups. The researchers of this study also compared the percentage of each category between male and female. The results show that the risk of "high interest" and "consequences of late payment" are felt more strongly by female respondents. The percentage for the "high interest" was 72.41% (21 responses) in the female respondent group and 27.59% (8 responses) for the male respondent group. The percentage of "consequences of late payment" for the female respondent group was 66.67% (2 responses), and only 33.33% (1 response) for the male respondent group. Meanwhile the "reduction in future financial allocations" has an equal percentage of 50% (each of which amounts to 6 responses). The following is a graph that describes the percentage of each category.
Graph 8. Comparison of risk of financial loss categories between male and female.
The category with the higher percentage for risk of psychological loss due to debt among men is "negative emotions" at 63% (10 responses). The category with the second highest percentage is "feeling bounded to installments" at 31% (5 responses). The last category is the "vulnerability to consumptive behavior" at 6% (1 response). Female respondents also showed the same pattern. The category with the highest percentage among all the categories, is negative emotions at 42% (8 responses), followed by "feeling bounded to installments" at 32% (6 responses), and "vulnerability to consumptive behavior" at with 26% (5 responses). We also compared the percentage of categories regarding the risk of psychological losses due to debt in both gender groups. The percentage of men who experienced "negative emotions" (55.56%; 10 responses) was higher than women (44.44%; 8 responses). Conversely, the percentage for women was higher than men in the "bounded by installment" category and "vulnerability to consumptive behavior." The percentage of women who experienced the risk of loss from debt in the form "bounded to installment" burden is 54.55% (6 responses

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of loss for men is 45.45% (5 responses). The percentage of women who experienced "vulnerability to consumptive behavior" is 83.33% (5 responses) while the percentage of men having the same experience is 16.67% (1 response).
Graph 11. Comparison the percentage of categories of risk of psychological loss in male and female respondent groups

Discussion
The demographic data shows that 77.66% of respondents are married. It seems that this marital status effects respondents' responses. In household financial decision making, there are alpha and beta roles. The person who plays the alpha role take on a more significant role in the household and are tasked with earning/collecting money. On the other hand, the person who take on the beta role have smaller financial responsibilities and more spending roles (Wood, Downer, Lees & Toberman, 2012). In Indonesia, it is more common for men to take the alpha role and women as the beta role. Men are considered as breadwinners while women are more likely to carry out domestic tasks.
From Graph 4, it can be seen that the responses from men who emphasize one of the gains of debt being a mean to meet needs are higher than the responses from women. In eastern culture, men are identical to breadwinners. Men are in charge of making money to meet the family's needs. Men make the financial decision regarding matters such as vehicle purchases, investment, financial decision making related to children, savings, retirement plans and decisions related to home purchases (Lim, Teo & Leng, 2003). Therefore, the gains of debt being a means to fulfill needs are of higher value for male respondents.
In the same graph, the percentage of profit risk towards debt in women is generally higher than that of men. Judging from the categories that emerged from the responses, women give more weight to buying investment goods, quick acquirement of desired/needed goods, ease of taking out a loan, and financial solutions as the gains of debt. The categories that emerge places more emphasis on money management efforts. This is closely related to the role of women in the eastern culture. Women are synonymous with the role of managing finances. Money management such as paying installments, shopping for necessities, or allocating and managing monthly expenditures. That being said, shopping for daily needs are decisions mostly done by women (Alsemgeest & Grobberlaar, 2015). Therefore, facilities that offer the quick acquirement of funds, Comparison the percentage of categories of risk of psychological loss in male and female respondent groups ease of debt repayment, benefits of discounted rates, as well as solutions to financial problems currently receive particular attention from women.
In Graph 8, the percentage of women who rate "high interest" and "consequences of late payment" category as debt losses is higher than men. Meanwhile the percentage of men and women who stated decrease of future allocation as a risk of financial loss is equal at 50 %. Women in comparison to men very much felt the risk of debt towards finance. When looking at the roles of men and women in household financial management, it seems reasonable that women emphasize "high interest" and "consequences of late payment" as debt risk. Men play a role as breadwinners while women manage the finances of the family's daily needs. High installments and the consequences of late payments will affect family financial arrangements.
Relative to men, women are more concerned with matters related to the budgeting (Lim et al., 2003). Women will be happy when they can save, manage money well, use money carefully and save money in case of any emergency needs. High interest and the risk of paying penalties due to late payment make them uneasy as the money they have saved become reduced. Moreover, women also care more about money. Women can understand the difficulty of earning money (Lim et al., 2003). Therefore, they are reluctant to pay high interests and late fees.
The risk of psychological loss from debt that is most felt by women is vulnerability to consumptive behavior. Women generally have a lot of interest in shopping (Sereetrakul, Wongveeravuti & Likitapiwat, 2013). With easy access to debt facilities (such as credit cards), customers can shop at any time. However, they become less aware of how much money has been used for shopping (van Raaij, 2016). Therefore, they are vulnerable to over-buying through credit purchases.
The next risk of loss is the feeling of being bound to installments, which includes the burden of paying monthly installment and the duration of the installment plan. Installments that must be paid each month creates a burden on customers. The longer the debt period, the higher the psychological burden felt by women. This is possibly because women deal a lot with daily budgets. Therefore, setting aside money to pay installments and interest is perceived as an unpleasant matter for women.
Conversely, negative emotions are felt more strongly by men relative to women. For men, money or income is a tool for evaluating one's success (Lim & Teo, 1997). For men, owing debt is a cause of shame, living with unsettled feelings and moral burden. The moral burden in question is because in Indonesia there are religions which consider debt as usury, leading the customer to feel guilty.

Conclusion
In considering debt as an alternative payment, the customer provides an assessment of the gains and losses they will face. Assessment of the gains of debt is influenced by the social roles of men and women within society. Because men play the role of breadwinners, men see debt as an alternative to fulfill needs. Whereas women who engage in many money management activities assess debt as a means to ease financial allocations management such as investment allocation, the speed of obtaining desired/needed goods, ease of taking out a loan as well as becoming a financial solution.
Assessment of debt losses is divided into two perspectives, namely conditions of financial loss and conditions of psychological loss. Financial losses are felt more by women. This is indicated by the percentage of women's response which indicated high interest and the consequences/penalties of late payments as debt losses. Women also give weight to psychological losses of debt, namely being bounded to installments and vulnerability to consumptive purchases.
The feeling of being bound to paying installments is closely related to the role of women as money managers. Meanwhile, women are also afraid to become consumptive because they realize that they love shopping. Ease of taking out a loan will encourage them to shop leading them to have difficulty controlling expenses. Psychologically, men assess that debt can lead them to experience negative emotions. These negative emotions arise because they have the burden to pay off the debt as well as the moral burden of debt.
The focus of this research is the risk of debt ownership. The concept of debt used is still too broad, namely credit card debt, housing development loan (mortgage) and bank debts. Therefore, the respondents who participated in this study varied. In future studies, more specific research, i.e., on certain types of debt ownership, can be conducted. For example, in collateral debt (e.g., mortgage) and unsecured debt (credit card), thus a description of the debt risks of each type of debt can be obtained.