A New Metric to Gauge Household Economic Stress: Improving on the Misery Index

Robert A Dye and Chad Sutherland

Business Economics, 2009, vol. 44, issue 2, 109-113

Abstract: We present an improvement on the Misery Index that quantifies the economic stress that households are feeling today. Much of the economic stress in households today stems from the decline in household wealth that has come as a result of falling house prices, so we have added a measure of house price change to the Misery Index. Deteriorating economic conditions in most U.S. regions through the first three quarters of 2008 have resulted in increasing household economic stress as all components of the expanded Household Economic Stress Index increased. The components are the rate of change in the consumer price index, the unemployment rate, and rate of change in house prices. The authors show that this intuitive and simple index is useful in analyzing mortgage delinquencies both nationally and regionally.Business Economics (2009) 44, 109–113. doi:10.1057/be.2009.3

Date: 2009
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