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Measuring economic vulnerability: a Structural Equation Modeling approach

Author

Listed:
  • Ambra Altimari

    (University of Cassino and Lazio Meridionale)

  • Simona Balzano

    (University of Cassino and Lazio Meridionale)

  • Gennaro Zezza

    (University of Cassino and Lazio Meridionale)

Abstract

The aim of this paper is to use a multivariate approach to improve the methodology for measuring the economic vulnerability of developing countries. The official index used by the United Nations, the Economic Vulnerability Index (EVI), is a composite indicator defined as the weighted average of a set of variables measuring i) the exposure to exogenous shocks and ii) the consequences of such shocks. We propose to extend the EVI model in order to include variables measuring resilience, i.e. the ability of a country to recover after a shock has occurred, and we evaluate the Structural Equation Model approach to compute a general vulnerability index. Since we analyse data covering 98 countries and 19 years we propose a strategy for dealing with repeated SEM results.

Suggested Citation

  • Ambra Altimari & Simona Balzano & Gennaro Zezza, 2018. "Measuring economic vulnerability: a Structural Equation Modeling approach," Working Papers 2018-01, Universita' di Cassino, Dipartimento di Economia e Giurisprudenza.
    • Handle: RePEc:csn:wpaper:2018-01
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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