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1.
Int J Environ Res Public Health ; 19(19)2022 Sep 30.
Article in English | MEDLINE | ID: covidwho-2065983

ABSTRACT

This paper aims to analyse factors affecting financial stress among the Bottom 40 Percent (B40) group of Malaysian households, reflecting overall financial well-being. Data were collected through questionnaires from 1008 respondents across five major regions in Malaysia. The data were analysed using Exploratory Factor Analysis (EFA) and Partial Least Squares-Structural Equation Modelling (PLS-SEM). This study provides evidence that financial behaviour, financial vulnerability (debt and income), and locus of control (luck and self-confidence) significantly affect financial stress among B40 households. The results show a significantly positive relationship between financial stress with financial vulnerability (debt and income) and locus of control (self-confidence). On the contrary, financial behaviour and locus of control (luck) show a significant negative relationship with financial stress. The result also indicates that financial stress affects financial well-being. Overall, the findings indicate that policy-makers should invent more effective and substantial stimulus packages or other measures to reduce the financial burden on B40 households. The findings could eventually provide insights for future research to delve into the social impact of financial stress. This study also has established a valid and reliable instrument to measure financial stress involving B40 households in Malaysia that eventually reflects the financial well-being of this group of people.


Subject(s)
Family Characteristics , Financial Stress , Humans , Income , Malaysia , Surveys and Questionnaires
2.
SSRN; 2022.
Preprint in English | SSRN | ID: ppcovidwho-344251

ABSTRACT

The objective of this paper is to analyse the impact of COVID-19 on household financial vulnerability in Cameroon. To achieve this objective, we use several estimation techniques to assess the effect of the COVID-19 pandemic on financial vulnerability as measured by two proxies: consumption expenditures and the level of domestic savings of households. Data were obtained from the World Bank, the Bank of Central African States and the National Institute of Statistics. The empirical results reveal that the COVID-19 increases household financial vulnerability. Indeed, COVID-19 drastically reduced household consumption expenditures and gross domestic savings in Cameroon. We recommend price stability to increase household purchasing power and allow for long-term savings.

3.
Managerial Finance ; 48(9/10):1391-1412, 2022.
Article in English | ProQuest Central | ID: covidwho-2018560

ABSTRACT

Purpose>The COVID-19 pandemic has exposed the financial-economic vulnerability of the public and threatened the household financial stability, especially of the low-income group population, in developing economies such as India. The assessment of household financial vulnerability has gained considerable attention these days, especially in poor and developing countries. This article seeks to assess the level of household financial vulnerability in India, based on a household survey conducted across India.Design/methodology/approach>This paper has proposed a financial vulnerability index (FVI) based on three self-reported parameters: (1) making end meet, (2) perception of income shock and (3) perception of expenditure shock. Subsequently, the impact of various behavioural and socioeconomic factors on the proposed financial vulnerability index has been assessed using fractional probit regression.Findings>The research findings indicate that higher financial knowledge, better money management skills and lower impulsivity in financial behaviour can reduce financial vulnerability. It is suggested that suitable financial literacy programmes be implemented for vulnerable sections of society to enhance their financial knowledge, improve money management skills and manage impulsivity, thereby helping them make informed financial decisions leading to their financial well-being.Originality/value>To the best of the authors’ knowledge, none of the past studies have developed and assessed the financial vulnerability index in India. This study provides relevant recommendations for various financial sector regulators and government institutions in India.

4.
Journal of Public Budgeting, Accounting & Financial Management ; 33(4):387-408, 2021.
Article in English | ProQuest Central | ID: covidwho-1992533

ABSTRACT

Purpose>This paper explores how global pandemic crises affect the financial vulnerability of municipalities.Design/methodology/approach>This paper is developed from the relevant literature an analytical framework to examine municipal financial vulnerability before a global pandemic crisis and in its immediate aftermath by mapping and systematizing its dimensions and sources. To illustrate how it can be used and evaluate its robustness and flexibility, such a tool was applied to Portugal and Italy, two countries that particularly suffered from the Covid-19 crisis.Findings>The application of the analytical framework has shown how financially vulnerable municipalities are to global pandemic crises. Financial vulnerability relates to issues ranging from institutional design to internal financial conditions and the perception of the capacity to cope with a crisis. Results further reveal that vulnerability has an inherent contingent nature in time and space and can lead to paradoxical outcomes.Research limitations/implications>This paper provides a tool that can be useful for both academic and public policy purposes, to further appreciate municipal financial vulnerability, especially during crises.Practical implications>Municipalities can use the framework to better manage their financial vulnerability, strengthening their anticipatory and copying capacities, while oversight authorities can use it to help municipalities become less financially vulnerable or, at least, more aware of their financial vulnerability.Originality/value>Municipal financial vulnerability to global shocks has not been explored extensively. Also, the Covid-19 pandemic is different from previous global crises as it affected society overnight with the implementation of lockdown and social distancing measures.

5.
Journal of Financial Counseling and Planning ; 33(2):228-242, 2022.
Article in English | ProQuest Central | ID: covidwho-1933445

ABSTRACT

In this article, we projected household financial vulnerability in the COVID-19 pandemic. Using a nationally representative sample of households from the 2017 Panel Study of Income Dynamics (PSID), we analyzed potential changes in financial status in the pandemic resulting from loss of income and savings from discretionary consumption. We provided a ranking of household groups by their financial vulnerability and the first estimate of the number of households at various degrees of financial vulnerability. Our study showed that a substantial part of the universal stimulus payments was made to households that had sufficient income to cover basic needs and those saved by reducing discretionary expenses. For the most financially vulnerable, the first one-time stimulus payment was too little and too late to help with their financial difficulties. Our findings shed light on to whom and in what form the US government should direct financial assistance during the pandemic.

6.
J Consum Policy (Dordr) ; 45(2): 281-306, 2022.
Article in English | MEDLINE | ID: covidwho-1859026

ABSTRACT

The purpose of this study is to test the notion that the use of digital payment methods, such as paying with a mobile phone, increases the risk of financial vulnerability. Research from the USA indicates such a relationship, and we study whether this finding can be generalized to other countries. Motivated by recent changes in EU legislation related to financial transactions, we also examine willingness to use social media companies for money transfers along with sharing bank account information with third-party financial services. Exploiting data collected from a representative sample of the Norwegian adult population (n = 2202), we identify differences in financial behaviour and characteristics between users and nonusers of different digital payment methods. In contrast to US studies, we find that mobile payment users were less financially vulnerable than nonusers and those women were more likely users of digital payment technologies than men. Younger generations and those with low financial literacy were more financially vulnerable than others, although we did not find this to be related to the use of mobile payment or other digital payment methods. The results show that there is a need for more research from different countries outside of the USA to obtain an understanding of the consequences of increased digitalization of financial services. In addition, as COVID-19 has shifted a vast amount of spending online and these newer payment technologies have become more available, we need to gain a better understanding of how they influence financial behaviour.

7.
Journal of Consumer Policy ; 45(2):281-306, 2022.
Article in English | ProQuest Central | ID: covidwho-1857533

ABSTRACT

The purpose of this study is to test the notion that the use of digital payment methods, such as paying with a mobile phone, increases the risk of financial vulnerability. Research from the USA indicates such a relationship, and we study whether this finding can be generalized to other countries. Motivated by recent changes in EU legislation related to financial transactions, we also examine willingness to use social media companies for money transfers along with sharing bank account information with third-party financial services. Exploiting data collected from a representative sample of the Norwegian adult population (n = 2202), we identify differences in financial behaviour and characteristics between users and nonusers of different digital payment methods. In contrast to US studies, we find that mobile payment users were less financially vulnerable than nonusers and those women were more likely users of digital payment technologies than men. Younger generations and those with low financial literacy were more financially vulnerable than others, although we did not find this to be related to the use of mobile payment or other digital payment methods. The results show that there is a need for more research from different countries outside of the USA to obtain an understanding of the consequences of increased digitalization of financial services. In addition, as COVID-19 has shifted a vast amount of spending online and these newer payment technologies have become more available, we need to gain a better understanding of how they influence financial behaviour.

8.
The International Journal of Bank Marketing ; 40(3):425-457, 2022.
Article in English | ProQuest Central | ID: covidwho-1774483

ABSTRACT

Purpose>The authors draw on psychological reactance theory, collective mental programming, psychological profiles and financial vulnerability experiences to assess the possibility that the pandemic may induce transformative changes in households' behavioral intentions related to financial decisions after the pandemic is over.Design/methodology/approach>Using a unique survey data drawn from four different countries located in North America, Europe, Africa and Latin America, the authors show that the stressful conditions that accompanied the pandemic have instigated a state of financial vulnerability and stimulated instinctual defensive mechanisms among consumers.Findings>The study results indicate that households have intentions to make defensive decisions in spending, consumption, planning and investment. Furthermore, the authors report evidence that personal psychological heterogeneity (as an individual factor) and collective mental programming (as a cultural factor) play a significant role in shaping households' postpandemic financial intentions.Research limitations/implications>The study findings carry important practical implications. For financial institutions, marketers and financial advisors, the authors’ work implies that individual and collective factors affect people's perception and behavioral intentions in response to financial adversities. For social planners and legislators, the authors’ work shows that they should expect not only short-term but also long-term reactions to the COVID-19 pandemic.Originality/value>Most research on the impact of COVID-19 pandemic on households' financial behavior focuses on transitional adjustments made during the pandemic, and little emphasis has been placed on potential postpandemic adjustments. The authors contend that it would be a mistake to analyze the pandemic-induced crisis as a temporary financial hardship.

9.
Managerial Finance ; ahead-of-print(ahead-of-print):22, 2022.
Article in English | Web of Science | ID: covidwho-1769512

ABSTRACT

Purpose The COVID-19 pandemic has exposed the financial-economic vulnerability of the public and threatened the household financial stability, especially of the low-income group population, in developing economies such as India. The assessment of household financial vulnerability has gained considerable attention these days, especially in poor and developing countries. This article seeks to assess the level of household financial vulnerability in India, based on a household survey conducted across India. Design/methodology/approach This paper has proposed a financial vulnerability index (FVI) based on three self-reported parameters: (1) making end meet, (2) perception of income shock and (3) perception of expenditure shock. Subsequently, the impact of various behavioural and socioeconomic factors on the proposed financial vulnerability index has been assessed using fractional probit regression. Findings The research findings indicate that higher financial knowledge, better money management skills and lower impulsivity in financial behaviour can reduce financial vulnerability. It is suggested that suitable financial literacy programmes be implemented for vulnerable sections of society to enhance their financial knowledge, improve money management skills and manage impulsivity, thereby helping them make informed financial decisions leading to their financial well-being. Originality/value To the best of the authors' knowledge, none of the past studies have developed and assessed the financial vulnerability index in India. This study provides relevant recommendations for various financial sector regulators and government institutions in India.

10.
BMC Public Health ; 22(1): 590, 2022 03 26.
Article in English | MEDLINE | ID: covidwho-1765444

ABSTRACT

BACKGROUND: We estimated socioeconomic factors associated with food insecurity during the first year of the Covid pandemic in the UK and explored potential mechanisms explaining these associations. METHODS: Data were from the April, July, and September 2020 waves of the UK Understanding Society Covid Survey. Food insecurity was measured as 'not having access to healthy and nutritious food' and 'reporting being hungry but not eating'. Logistic regression estimated the relationship between socioeconomic factors and food insecurity. A decomposition approach explored if financial vulnerability and having Covid-19 explained associations between socioeconomics factors and food insecurity. RESULTS: Single parents and young people aged 16-30 years had a higher odds of reporting both measures of food insecurity. Financial insecurity explained 5% to 25% of the likelihood of reporting being food insecure for young people and single parents depending on the food insecurity measure used. Experiencing Covid-19 symptoms explained less than 5% of the likelihood of being food insecure for single parents but approximately 30% of not having access to healthy and nutritious food for young people. CONCLUSION: Policies providing additional financial support may help to reduce the impact of Covid-19 on food insecurity in the UK.


Subject(s)
COVID-19 , Pandemics , Adolescent , Adult , COVID-19/epidemiology , Food Insecurity , Food Supply , Humans , Socioeconomic Factors , United Kingdom/epidemiology , Young Adult
11.
International Journal of Bank Marketing ; ahead-of-print(ahead-of-print):33, 2021.
Article in English | Web of Science | ID: covidwho-1583890

ABSTRACT

Purpose The authors draw on psychological reactance theory, collective mental programming, psychological profiles and financial vulnerability experiences to assess the possibility that the pandemic may induce transformative changes in households' behavioral intentions related to financial decisions after the pandemic is over. Design/methodology/approach Using a unique survey data drawn from four different countries located in North America, Europe, Africa and Latin America, the authors show that the stressful conditions that accompanied the pandemic have instigated a state of financial vulnerability and stimulated instinctual defensive mechanisms among consumers. Findings The study results indicate that households have intentions to make defensive decisions in spending, consumption, planning and investment. Furthermore, the authors report evidence that personal psychological heterogeneity (as an individual factor) and collective mental programming (as a cultural factor) play a significant role in shaping households' postpandemic financial intentions. Research limitations/implications The study findings carry important practical implications. For financial institutions, marketers and financial advisors, the authors' work implies that individual and collective factors affect people's perception and behavioral intentions in response to financial adversities. For social planners and legislators, the authors' work shows that they should expect not only short-term but also long-term reactions to the COVID-19 pandemic. Originality/value Most research on the impact of COVID-19 pandemic on households' financial behavior focuses on transitional adjustments made during the pandemic, and little emphasis has been placed on potential postpandemic adjustments. The authors contend that it would be a mistake to analyze the pandemic-induced crisis as a temporary financial hardship.

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