Empirical Methods for Modelling Economic Insecurity

Nicholas Rohde, Conchita D’Ambrosio () and Barry Watson ()
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Conchita D’Ambrosio: University of Luxembourg
Barry Watson: University of New Brunswick
Authors registered in the RePEc Author Service: Conchita D'Ambrosio

Chapter Chapter 6 in Advances in Economic Measurement, 2022, pp 265-306 from Springer

Abstract: Abstract This chapter presents an overview of some of the technical methods used to measure Economic Insecurity (EI). We discuss conceptual challenges associated with measurement and provide a basic conceptual model for characterizing anxiety stemming from economic risk. Surveyed methods include (i) subjective indices, (ii) axiomatic methods derived from microeconomic theory, (iii) micro-econometric approaches and (iv) macro-level or aggregate methods. Some illustrations are provided using Australian panel data. We show that there is considerable heterogeneity in outcomes across different measurement concepts—it is common for markers to be uncorrelated or even negatively associated across our sample. More work is needed integrating alternative risk concepts within the broader framework of EI. Despite this ambiguity, two robust results still emerge. Across a suite of different measures, EI is (i) correlated with other markers of social disadvantage, and (ii) predictive of diminished health and well-being, even after conditioning on current socioeconomic status.

Keywords: Anxiety; Risk; Uncertainty; Stress; Panel data (search for similar items in EconPapers)
JEL-codes: D31 D90 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-19-2023-3_6

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DOI: 10.1007/978-981-19-2023-3_6

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