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Measuring Economic Insecurity

Author

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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 07-2009, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  • Handle: RePEc:mtl:montec:07-2009
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    References listed on IDEAS

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    1. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
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    6. Horst Zank, 2007. "Social welfare functions with a reference income," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(4), pages 609-636, June.
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    Cited by:

    1. Jacob S. Hacker & Gregory A. Huber & Austin Nichols & Philipp Rehm & Mark Schlesinger & Rob Valletta & Stuart Craig, 2014. "The Economic Security Index: A New Measure for Research and Policy Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 5-32, May.
    2. Daniele Vignoli & Letizia Mencarini & Giammarco Alderotti, 2018. "Is the Impact of Employment Uncertainty on Fertility Intentions Channeled by Subjective Well-Being?," Econometrics Working Papers Archive 2018_04, Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti".
    3. Rohde, Nicholas & Tang, Kam Ki & Osberg, Lars & Rao, D.S. Prasada, 2017. "Is it vulnerability or economic insecurity that matters for health?," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 307-319.
    4. Markus Jäntti & Ravi Kanbur & Milla Nyyssölä & Jukka Pirttilä, 2014. "Poverty and Welfare Measurement on the Basis of Prospect Theory," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 182-205, March.
    5. Rohde, Nicholas & Tang, K.K. & Osberg, Lars & Rao, Prasada, 2016. "The effect of economic insecurity on mental health: Recent evidence from Australian panel data," Social Science & Medicine, Elsevier, vol. 151(C), pages 250-258.
    6. Francesca Modena & Concetta Rondinelli & Fabio Sabatini, 2014. "Economic Insecurity and Fertility Intentions: The Case of Italy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 233-255, May.
    7. MORENO-TERNERO, Juan & OSTERDAL, Lars P., 2014. "Normative foundations for equity-sensitive population health evaluation functions," CORE Discussion Papers 2014031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Marta Barazzetta & Andrew E. Clark & Conchita D'Ambrosio, 2017. "Childhood Circumstances and Young Adulthood Outcomes: The Effects of Mothers' Financial Problems," PSE Working Papers halshs-01622334, HAL.
    9. Marina Romaguera de la Cruz, 2017. "Economic insecurity in Spain: A multidimensional analysis," Working Papers 448, ECINEQ, Society for the Study of Economic Inequality.
    10. Gustav Kjellsson & Dennis Petrie & Tom (T.G.M.) van Ourti, 2018. "Measuring income-related inequalities in risky health prospects," Tinbergen Institute Discussion Papers 18-007/V, Tinbergen Institute.
    11. Corman, Hope & Noonan, Kelly & Reichman, Nancy E. & Schultz, Jennifer, 2012. "Effects of financial insecurity on social interactions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 574-583.
    12. Gabriella Berloffa & Francesca Modena, 2014. "Measuring (In)Security in the Event of Unemployment: Are We Forgetting Someone?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 77-97, May.
    13. Lars Osberg & Andrew Sharpe, 2014. "Measuring Economic Insecurity in Rich and Poor Nations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 53-76, May.
    14. Mariña Fernández Salgado & Francesco Figari & Holly Sutherland & Alberto Tumino, 2014. "Welfare Compensation for Unemployment in the Great Recession," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 177-204, May.
    15. Staudigel, Matthias, 2016. "A soft pillow for hard times? Economic insecurity, food intake and body weight in Russia," Journal of Health Economics, Elsevier, vol. 50(C), pages 198-212.
    16. Javier Espinosa & Jorge Friedman & Carlos Yevenes, 2014. "Adverse Shocks and Economic Insecurity: Evidence from Chile and Mexico," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 141-158, May.
    17. Staudigel, Matthias, 2015. "A soft pillow for hard times: Effects of economic insecurity on body weight in transitional Russia," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205189, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    18. Artjoms Ivlevs, 2014. "Economic Insecurity in Transition: A Primary Commodities Perspective," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 117-140, May.
    19. Conchita D'Ambrosio & Nicholas Rohde, 2014. "The Distribution of Economic Insecurity: Italy and the U.S. over the Great Recession," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 33-52, May.
    20. Nicholas Rohde & Kam Ki Tang & D.S. Prasada Rao, 2014. "Distributional Characteristics of Income Insecurity in the U.S., Germany, and Britain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 159-176, May.

    More about this item

    Keywords

    Insecurity; Wealth Distribution; Social Index Numbers;

    JEL classification:

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

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