Financial Stress
Indicator Rationale
The most common approach to measuring and defining poverty is the low income approach. It has been suggested that an alternative approach, or one that could be combined with measures of low income in order to improve measurement of economic well-being, is to assess poverty and disadvantage by measuring "financial stress". A symptom of "financial stress" is the inability to raise a moderate sum of money to deal with an emergency of the kind created by the need to pay an unexpected bill.
Data Source
Data were collected in telephone surveys conducted in October 2004 and January 2006. In each LGA in Victoria, 300 residents over the age of 18 were surveyed. This is the same sample size as used in the CIV Survey.
DPCD cautions against using the data from the two surveys for time trend analysis. For a number of reasons (including sampling variability), data can fluctuate considerably from one survey to the next, potentially masking overall trends. In addition, the two surveys conducted were not run at the same time of the year, and therefore some results may reflect seasonal variation.
Measure
People Who Could Raise 2000 Dollars in Two Days in an Emergency: expressed as a percentage of the adult population.
For 2006, the response category "Yes, definitely" has been used to derive the measure.
Survey Question
Could you raise $2000 within two days in an emergency?
2006 response categories - Yes, definitely; Sometimes; No, not at all
2004 response categories - Yes; No
A question of this nature may be particularly sensitive to differences in methodologies between particular surveys. DPCD has noted the difference between the total Victorian result for this question from the 2004 DPCD survey (63%) and that from the Victorian Population Health Survey (VPHS) (82% in the corresponding survey). It is thought that the longer VPHS may allow more time for the interviewer to establish trust with the respondent before asking what may be a sensitive question for some respondents.
References
Long, S (2006). Transcript from The World Today, ABC Local Radio
Melbourne Institute of Applied Economic and Social Research, Inequalities of Aussie Wealth. September 2005. Issue 9.
