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Household financial vulnerability in Indonesia: Measurement and determinants
#MMPMID32836621
Noerhidajati S
; Purwoko AB
; Werdaningtyas H
; Kamil AI
; Dartanto T
Econ Model
2021[Mar]; 96
(?): 433-444
PMID32836621
show ga
This study assesses the level of financial vulnerability of Indonesian households
using data from the Household's Balance Sheet Survey (Survei Neraca Rumah
Tangga/SNRT) 2016 and 2017. The SNRT are micro-unit of household data that
contains information on preferences and behavior. Through both objective and
subjective measurements of the Household Financial Vulnerability Index (FVI), we
find that the financial vulnerability of Indonesian households is not only
strongly influenced by income factors, but also by finance-related behavioral
characteristics and several socio-economic factors. As a consistency and
robustness check, we also estimate econometric models using the Indonesian Family
Life Survey (IFLS) panel data for the periods 1993, 1997, 2000, 2007 and 2014.
Our study then conclude that the level of household financial vulnerability
decreased in 2017. Moreover, the study suggests that we should carefully monitor
the behaviour of middle income group as they contribute significantly to the
household financial vulnerability in Indonesia.