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Measuring Economic Insecurity

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  • BOSSERT, Walter
  • D’AMBROSIO, Conchita

Abstract

We provide a systematic treatment of the notion of economic insecurity, assuming that an individual’s sentiment of insecurity depends on the current wealth level and its variations experienced in the past. We think of wealth as a comprehensive variable encompassing anything that may help in coping with adverse occurrences. The current wealth level could also be interpreted as incorporating the individual’s evaluation of future prospects. Variations in wealth experienced in the recent past are given higher weight than experiences that occurred in the more distant past. Two classes of measures are characterized with sets of plausible and intuitive axioms.

Suggested Citation

  • BOSSERT, Walter & D’AMBROSIO, Conchita, 2009. "Measuring Economic Insecurity," Cahiers de recherche 2009-06, Universite de Montreal, Departement de sciences economiques.
    • Handle: RePEc:mtl:montde:2009-06
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    File URL: http://hdl.handle.net/1866/2743
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    References listed on IDEAS

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    More about this item

    Keywords

    Insecurity; Wealth Distribution; Social Index Numbers;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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