Measuring Economic Insecurity

Walter Bossert () and Conchita D'Ambrosio ()

No 111, Working Papers from ECINEQ, Society for the Study of Economic Inequality

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.

Keywords: Insecurity; Wealth Distribution; Social Index Numbers (search for similar items in EconPapers)
JEL-codes: D63 (search for similar items in EconPapers)
Date: Written
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