Measures Of Financial Stress Research Articles

A Revised Occupational Stress Measure for Popular Musicians: Pilot Test of Validity and Reliability

Popular (i.e., nonclassical) musicians have higher rates of depression, anxiety, and suicide than the general population. Occupational and financial stress have been suggested to be social determinants of musician mental health burden. A pilot study was conducted to assess the internal consistency and test-retest reliability of a revised measure of popular musician occupational stress and compare the results to those of other, previously validated instruments used in the same survey. An online survey was emailed to a convenience sample of 150 musicians who had formerly accessed mental health services through a non-profit organization in Austin, Texas. The survey included a revised Musician Occupational Stress Scale (MOSS), a measure of financial stress, and instruments to screen for clinically significant depression, anxiety, and alcohol misuse. Forty musicians (26.7%) completed the initial survey and 19 completed a repeat survey 2 weeks later for the test-retest comparison. Internal consistency coefficients for individual instruments ranged from 0.86-0.92. The piloted MOSS demonstrated good internal consistency (Cronbach's α=0.91; one-sided 95% CI ≥0.88) and test-retest reliability (r=0.86; p<0.0001). The MOSS also showed reasonable construct validity, correlating well with a single question of perceived occupational stress (ρ=0.46; p<0.001) over career satisfaction (ρ=-0.09; p>0.05). The individual, construct-specific measures included in this survey all demonstrated good internal consistency and test-retest reliability on examination. While the results are preliminary due to the small sample size, the MOSS psychometrically performed at a level equal to or better than other widely used and well-validated measures included in this survey.

Household income requirements and financial conditions

Understanding the income requirements of households is important for examining why households become financially stressed and liquidity constrained. Our econometric approach relies on actual incidences of household-specific financial stress to determine household income requirements. Using an extensive longitudinal dataset of Australian households, we find significant lifecycle effects in income requirements and identify the household types which benefit or are disadvantaged by the typical 30% debt to income measure of financial stress. We also find that, in general, households are locked into tight spending patterns such that, with the exception of households in the top income quintile, financial stress occurs when negative income shocks exceed 30%.

Home Is Where You Hang Your Hat: Host Town Identity, But Not Hometown Identity, Protects Against Mental Health Symptoms Associated with Financial Stress

Debt and financial insecurity are associated with stress, low self-worth, and poor health. Joining and identifying with social groups (social identification) promotes better health and higher self-esteem. Here, we examined whether identifying with one's local neighborhood protected people from developing mental health symptoms associated with financial stress. We analyzed data from a general population survey (Study 1, N = 4319) and a student mental health survey (Study 2, N = 612) conducted in the North West of England. We administered measures of financial stress, self-esteem, neighborhood identity, and mental health, and conducted moderated mediation analyses to test our predictions. Study 1 (population survey) demonstrated that stronger identification with one's local neighborhood attenuated the adverse effects of financial stress on self-esteem and subsequent mental health. Study 2 (student survey) showed that strong host town identities buffered students from mental health symptoms related to financial stress. Strong hometown identities, however, showed no buffering effect. The findings suggest that one way financial stress impacts mental health is by eroding self-esteem. Identifying with one's current place of residence appears to disrupt this pathway, while identifying with one's previous place of residence does not provide the same psychological protection.

Comments by Doo Yong Yang, on Financial Conditions Indexes and Monetary Policy in Asia

June 01 2017 Comments by Doo Yong Yang, on Financial Conditions Indexes and Monetary Policy in Asia Author and Article Information Online Issn: 1536-0083 Print Issn: 1535-3516 © 2017 by the Earth Institute at Columbia University and the Massachusetts Institute of Technology2017Massachusetts Institute of Technology Asian Economic Papers (2017) 16 (2): 118–120. https://doi.org/10.1162/ASEP_a_00523 Cite Icon Cite Permissions Share Icon Share Facebook Twitter LinkedIn MailTo Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Search Site Citation Comments by Doo Yong Yang, on Financial Conditions Indexes and Monetary Policy in Asia. Asian Economic Papers 2017; 16 (2): 118–120. doi: https://doi.org/10.1162/ASEP_a_00523 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll JournalsAsian Economic Papers Search Advanced Search Doo Yong Yang: This paper constructs financial conditions indexes (FCIs) for Asian economies using a common factor method. The authors found that bank-related indicators, various measures of financial stress and risk, and credit surveys fully reflect the state of the financial environment in Asia among a wide range of financial variables. Second, the FCIs for Asia successfully capture important episodes in each economy's financial history. This confirms the usefulness of the FCI in Asia. Only the indexes of financially advanced economies Japan and Singapore have sufficient forecasting power to predict output growth and inflation, however. Previous literature argues that the FCIs have sufficient forecasting power to predict GDP growth, but less forecasting power for inflation. This paper also suggests that close co-movement of Asian FCIs implies highly similar monetary policies in the region that are strongly linked with monetary policy in the United States. There has been a series of... You do not currently have access to this content.

Financial Conditions Indexes and Monetary Policy in Asia

This paper constructs quarterly financial conditions indexes (FCIs) for eight Asian economies—namely, Hong Kong, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, and Thailand—using a common factor methodology based on Hatzius et al. ( 2010 ). A wide array of financial data is included in the indexes based on identified monetary transmission channels in the literature. Bank-related indicators, various measures of financial stress and risk, and credit surveys, where available, are incorporated to fully reflect the state of the financing environment. The FCIs for Asia successfully capture important episodes in each economy's financial history, but only the indexes of financially advanced economies Japan and Singapore have sufficient forecasting power to predict output growth and inflation. High co-movement of Asian FCIs suggests highly similar monetary policies in the region that are strongly linked with monetary policy in the United States.

Measuring the Financial Cycle in South Africa

We measure the financial cycle in South Africa using three different methodologies, consider its main characteristics and examine its relationships with the business cycle and a measure of financial stress. We identify the financial cycle using credit, house prices and equity prices as indicators, and estimate it using traditional turning-point analysis, frequency-based filters and an unobserved components model-based approach. We find evidence of a financial cycle in South Africa that has a longer duration and a larger amplitude than the traditional business cycle, and that periods where financial conditions are stressed are associated with peaks in the financial cycle. Developments in measures of credit and house prices are important indicators of the financial cycle, although the case for including equity prices in the measures is less certain.

How to Predict Financial Stress? An Assessment of Markov Switching Models

This paper predicts phases of the financial cycle by using a continuous financial stress measure in a Markov switching framework. The debt service ratio and property market variables signal a transition to a high financial stress regime, while economic sentiment indicators provide signals for a transition to a tranquil state. Whereas the in-sample analysis suggests that these indicators can provide an early warning signal up to several quarters prior to the respective regime change, the out-of-sample findings indicate that most of this performance is owing to the data gathered during the global financial crisis. Comparing the prediction performance with a standard binary early warning model reveals that the Markov switching model is outperforming the vast majority of model specifications for a horizon up to three quarters prior to the onset of financial stress.

The lower bound and the causes of monetary policy inertia: evidence from Sweden

ABSTRACTIn 2009, in the midst of a global recession, Sweden’s Riksbank approached a lower bound on nominal interest rates. This encounter with the lower bound provides a natural experiment for investigating the causes of monetary policy inertia. To exploit this experiment, we estimate Taylor rules with Tobit specifications that permit both interest rate smoothing and persistent shocks (serial correlation) as explanations for inertia. The interest rate smoothing hypothesis leads to a specification in which lagged actual values of the dependent variable appear on the right-hand side of the Taylor rule, while the persistent shocks hypothesis leads to a specification in which lagged values of an unobserved latent dependent variable appear on the right-hand side of the Taylor rule. The divergence of actual and latent dependent variables that occurs at the lower bound provides leverage in distinguishing the two hypotheses. For a conventional Taylor rule, we find evidence of both sources of inertia. For a modified Taylor rule that includes a measure of financial stress, our evidence suggests that interest rate smoothing is the principal source of monetary policy inertia.

The Financial Stress Index: Identification of Systemic Risk Conditions

This paper develops a financial stress measure for the United States, the Cleveland Financial Stress Index (CFSI). The index is based on publicly available data describing a six-market partition of the financial system comprising credit, funding, real estate, securitization, foreign exchange, and equity markets. This paper improves upon existing stress measures by objectively selecting between several index weighting methodologies across a variety of monitoring frequencies through comparison against a volatility-based benchmark series. The resulting measure facilitates the decomposition of stress to identify disruptions in specific markets and provides insight into historical stress regimes.

Changes in Financial Variables and Altman’s Z Score on Stock Price: Consideration of Firm Size and Market Risk

The valuation of common stock can be approached in several ways. Some models, known as dividend valuation models, rely solely on expected dividends and other models rely on longrun historical relationships between stock prices, financial variables, and market risk factors. This study, through correlation and regression analyses, identifies the most relevant variables affecting stock price changes of the Standard &amp; Poor’s 500 Index firms. Moreover, by applyingthe Altman financial stress model, the significance of changes in financial stress measures on stock prices is tested. In addition, the study investigates whether the effects of financial factors on stock prices depend on company size. Also, through mean and variance analysis, the equality of means and variances of larger and smaller firms exposed to market risks are examined. Among all financial variables considered, the changes in operating income and the financialstress measure are the most relevant factors affecting stock price variations. The results showed no strong positive relationship between changes in stock prices and dividends. The tests of equality of means and variances failed to support the notion that correlations between changes in stock prices and operating income, financial leverage, and total assets for small and large size firms differ. However, it rejected the hypothesis that variances of market risk of smalarge firms are equal.

Measuring Financial Stress A Country Specific Stress Index for Finland

​I propose a financial stress index (FSI) for the Finnish financial system that aims to reflect the functionality of the financial system and provide an aggregate measure of financial stress in the money, bond, equity and foreign exchange markets and the banking sector. The FSI is a composite index that combines information from these markets and provides a measure of stress in the financial system as a whole. The FSI has obvious benefits for all participants in the financial markets who need a tool for monitoring the functioning of the financial markets, as it provides information on systemic stress events which are not as easily captured with the stress measures of individual markets or sectors. The ESRB recommendation (ESRB, 2014a) also states that national or international FSIs could be used when making a decision about the release of the counter-cyclical capital buffer. Hence, the index can also be used to support the macro-prudential policy decision making in Finland.

Shifting the open enrollment period for ACA Marketplaces could increase enrollment and improve plan choices.

The next open enrollment period for plans offered in the Affordable Care Act's (ACA's) insurance Marketplaces is set to occur between November 15, 2014, and February 15, 2015--just when many lower-income people are financially stressed by demands of the holiday season. Recent research by experimental psychologists and behavioral economists strongly suggests that when people's decision-making capacity (bandwidth) is stretched thin, either they cannot make decisions or they make poor choices. Using data from nearly a decade of US-based Internet search queries to measure population behavior, we found considerable seasonality in measures of financial stress and in when people seek out information on health insurance plans. A more opportune time for scheduling open enrollment for the ACA Marketplaces may be between February 15 and April 15--weeks when low-income people typically receive income tax refunds and Earned Income Tax Credit payments. Such lump-sum payments could be applied to pay individuals' share of premiums.

Household repayment behaviour and neighbourhood effects

The recent financial crisis has revealed the financial vulnerability faced by a significant number of households in the UK. Households experiencing financial problems may potentially fall into arrears in meeting financial obligations such as rent, mortgage payments or household bills. Indeed, such arrears have been regarded as one of the most direct measures of financial stress at the household level. In this paper, we explore the relationship between household repayment behaviour and neighbourhood ties in order to identify possible channels of support for households experiencing financial stress. We analyse data on 17,723 households drawn from wave 1 of the UK longitudinal study, Understanding Society, merged with information on neighbourhood ties defined at the postcode area level elicited from a sample of 48,906 individuals. Our findings, which relate to the post financial crisis era, suggest that households in regions characterised by strong neighbourhood ties are less likely to report being in arrears and that this relationship is particularly apparent in the case of housing costs. This inverse relationship is strongest in regions characterised by a high density of individuals who feel able to turn to someone in the neighbourhood for support or advice. Thus, neighbourhood and community groups, which enhance social interaction and neighbourhood ties, may be effective channels of support for financially vulnerable households.

Financial Frictions and Sources of Business Cycle

This paper estimates a New Keynesian DSGE model with an explicit financial intermediary sector. Having measures of financial stress, such as the spread between lending and borrowing, enables the model to capture the impact of the financial crisis in a more direct and efficient way. The model fits US post-war macroeconomic data well, and shows that financial shocks play a greater role in explaining the volatility of macroeconomic variables than marginal efficiency of investment (MEI) shocks.

BRIC and the U.S. financial crisis: An empirical investigation of stock and bond markets

We examine empirical evidence of the behavior of stocks and bonds from BRIC nations by using daily data from January 2003 to July 2010. We present unconditional and conditional empirical results depending upon a simple measure of U.S. financial stress. In the long term, BRIC bond markets deviate much more from the U.S. financial stress measure than the BRIC bonds and stocks that deviate among themselves. Stock and bond return correlations for Brazil and Russia are significantly large and negative. The own correlations are more important in determining the evolution of the conditional correlations relative to unexpected news. Dynamic conditional correlations between stock returns, bond returns and U.S. financial stress increase after the Lehman Brothers' event in September 2008, except for the bond returns in India.

BRIC and the U.S. Financial Crisis: An Empirical Investigation of Stocks and Bonds Markets

We examine empirical evidence of the behavior of stocks and bonds from BRIC nations using daily data from January 2003 to July 2010. We present unconditional and conditional empirical results depending upon a simple measure of U.S. financial stress. In the long term, BRIC bonds markets deviate much more from the U.S. financial stress measure than BRIC bonds and stocks deviate among themselves. Stocks and bonds returns correlations for Brazil and Russia are significantly large and negative. The own correlations are more important in determining the evolution of the conditional correlations relative to unexpected news. Dynamic conditional correlations between stock returns, bond returns and U.S. financial stress increase after the Lehman Brothers event in September 2008, except for bond returns in India.

Disentangling Diverse Measures: A Survey of Financial Stress Indexes

The recent financial crisis helped emphasize the need for measures of financial conditions. In the wake of the crisis, several researchers and institutions—both private sector and central bank—developed measures of financial stress. These measures are intended to capture, among other things, the liquidity in financial markets and potentially forecast changes in real economic conditions. Unfortunately, there is no agreement about which variables should be included in a measure of stress. The authors survey a number of financial stress indexes, comparing the datasets from which they are constructed. In principle, each of the indexes measures the same thing; thus, they should be highly correlated. The authors find that in practice, however, the correlations are high but not as high as might be expected. They also evaluate the ability of the indexes to predict future economic activity in a simple vector autoregressive forecasting model.

The impact of the global financial crisis on the cross-currency linkage of LIBOR–OIS spreads

This article examines the impact of global financial crisis on cross-currency linkage of the LIBOR–OIS spread, a financial stress measure in interbank markets. The impulse response analysis is conducted in a multivariate setting, adopting the bias-corrected bootstrap as a means of statistical inference. The overall evidence suggests that the crisis has substantially changed the nature of the cross-currency interactions in liquidity stress. Also global money markets have failed to contain stress in US dollar funding and the role of the Japanese yen as a liquidity source appears to be significant, while these two currencies drive the cross-currency system of liquidity stress.

Debt and depression

We examine the effect of household financial indebtedness on psychological well-being using a large household survey of families with children in Britain. Existing studies that find a link between debt and depression tend to utilise small and highly selective samples of people and only self-reported measures of financial stress, responses to which are likely to correlate with subjective measures of health. From additional household data, we can construct a variety of ‘objective’ quantitative measures of financial stress in order to validate self-reported measures. We show that, although there is a positive association between subjective measures of financial well-being and psychological well-being, individuals differ in their psychological response to objective household financial situations. We also examine how the potential simultaneity of financial and psychological health might be handled.

The Development, Evaluation, and Validation of a Financial Stress Scale for Undergraduate Students

Financial stress is commonly experienced among college students and is associated with adverse academic, mental health, and physical health outcomes. Surprisingly, no validated measures of financial stress have been developed for undergraduate populations. The present study was conducted to generate and evaluate a measure of financial stress for undergraduate students. The newly developed scale and measures of demographics, general stress, and health were completed by 177 undergraduates. The reliability, validity, and factor structure of the new scale were evaluated. Results indicate good reliability and validity, suggesting that the measure can be used in research and in applied settings to assess financial stress. Possible implications are discussed.