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Methodological Tools for the Detection of Risks to the Welfare of the Individuals and the Territory of Residence

Author

Listed:
  • Aleksandr Kuklin

    (Institute of Economics of the Ural Branch of the Russian Academy of Sciences)

  • Maria Pecherkina

    (Institute of economy of UB RAS)

  • Alexander Tyrsin

    (Ural Federal University named after the first President of Russia B.N. Yeltsin)

  • Alfiya Surina

    (South Ural State University (national research University))

Abstract

To formalise the assessment of risks to the welfare of individuals and the territory of residence presents a relevant issue. This study aims to define the economic security in the structure of the system of the welfare of individuals and the territory of residence and to develop a classifier of risks. We consider the economic security as one of the needs for meeting which the welfare aims. The risk assessment includes three stages. At the first stage, we calculate the welfare of individuals and the territory. At the second stage, the authors determine the coefficient of variation to select indicators that will characterize the risks to the welfare. The third stage assumes the assessment of these risks, which reduce the welfare. The regional economic system is considered as a multidimensional stochastic system, which can be modelled as a vector random variable. The components of this variable generally are mutually correlated. The formalization of the assessment of risks to the welfare is based on this interpretation of the regional economic system. As a result, the authors highlighted the main threats to the welfare of individuals and the territory of residence. We have selected risk factors with high coefficient of variation, which indicates that the selected indicators have a high degree of variability. The research evaluates risks to the welfare of individuals and the territory of residence assessing the probability of the occurrence of crisis states for the regions of the Ural Federal District. The probabilities of the states pre-crisis 1 and pre-crisis 2 for all these regions are sufficiently high. It can indicate that the general social and economic state in the regions of the Ural Federal District is unstable. The findings can be used to develop an effective risk management system at the regional level.

Suggested Citation

  • Aleksandr Kuklin & Maria Pecherkina & Alexander Tyrsin & Alfiya Surina, 2017. "Methodological Tools for the Detection of Risks to the Welfare of the Individuals and the Territory of Residence," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1030-1043.
    • Handle: RePEc:ura:ecregj:v:1:y:2017:i:4:p:1030-1043
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    References listed on IDEAS

    as
    1. Georges Dionne & Casey G. Rothschild, 2012. "Risk Classification and Health Insurance," Cahiers de recherche 1232, CIRPEE.
    2. Just, Richard E. & Just, David R., 2011. "Global identification of risk preferences with revealed preference data," Journal of Econometrics, Elsevier, vol. 162(1), pages 6-17, May.
    3. Donatella Porrini, 2015. "Risk Classification Efficiency and the Insurance Market Regulation," Risks, MDPI, vol. 3(4), pages 1-10, September.
    4. Chavas, Jean-Paul, 2004. "Risk Analysis in Theory and Practice," Elsevier Monographs, Elsevier, edition 1, number 9780121706210.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Alexander Tsyganov & Nadezda Kirillova, 2018. "Regional Aspect of the Russian Insurance Market," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1270-1281.
    2. Andrey Novoselov & Ivan Potravnyy & IRINA NOVOSELOVA & Katherine Yeshia Chavez Ferreyra, 2018. "The Mechanism to Implement Environmental Investment Projects on the Basis of Equity Financing," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1488-1497.

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    More about this item

    Keywords

    welfare of individuals and the territory of residence; economic security; needs; risk; risk classifier; coefficient of variation; region; stochastic system; probability of crisis situations; random vector;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General

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