Measuring Financial Wellbeing with Self‐Reported and Bank Record Data

Carole Comerton‐Forde, John de New, Nicolas Salamanca, David Ribar, Andrea Nicastro and James Ross

The Economic Record, 2022, vol. 98, issue 321, 133-151

Abstract: We develop scales of the financial well‐being of customers of a major Australian bank using self‐reported survey data matched to customer financial records. Using item response theory (IRT) models, we develop: (1) a Reported Financial Wellbeing Scale from information about people’s experiences and perceptions of financial outcomes; and (2) an Observed Financial Wellbeing Scale from financial record measures of customers’ account balances, net spending and payment problems. Each scale reliably differentiates between a wide range of outcomes, and the scale components have similar power to discriminate. We confirm the validity of the scales by estimating predictive models using other measurable characteristics.

Date: 2022
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https://doi.org/10.1111/1475-4932.12664

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Working Paper: Measuring Financial Wellbeing with Self-Reported and Bank-Record Data (2020)
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