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Measuring Economic Insecurity

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  • Walter Bossert
  • Conchita D'Ambrosio

Abstract

We provide an axiomatic treatment of the measurement of economic insecurity, assuming that individual insecurity depends on the current wealth level and its variations experienced in the past. The first component plays the role of a buffer stock to rely on in case of an adverse future event. The second component determines the confidence an individual has on his ability to overcome a loss in the future. Experiences in the recent past are given higher weight than experiences that occurred in the more distant past.

Suggested Citation

  • Walter Bossert & Conchita D'Ambrosio, 2013. "Measuring Economic Insecurity," WIDER Working Paper Series wp-2013-008, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2013-008
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2013-008.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Methodology (Economics); Index numbers (Economics); Wealth;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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