Data Source and Methodology for Figure 9.15
The data presented in Figure 9.15, detailing indicators of credit market exclusion and constraints in the US for 2019, was gathered through surveys conducted by the US Federal Reserve Board. The findings were published in the 'Report on the Economic Well-Being of U.S. Households in 2019' by the Board of Governors of the Federal Reserve System in 2020.
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Data Source and Methodology for Figure 9.15
Financial Vulnerability in the US (2019)
Correlation Between Poverty and Credit Limitations
Credit Constraints Among High-Income Individuals in the US (2019)
Data Source and Methodology for Figure 9.15
Limitations of Survey Data for Assessing Credit Constraints
An economist is designing a survey to measure the prevalence of credit constraints in a population. One proposed question is: 'If you needed to borrow $5,000 for an emergency, do you think a bank would approve your loan application?' Which of the following represents the most significant analytical weakness of using responses to this question to determine if someone is credit constrained?
Evaluating a Method for Measuring Credit Constraints
Estimating Credit Constraints from Survey Data
A survey finding that 10% of the population was denied a loan in the last year fully captures the extent of credit constraints in that economy.
A team of economists is using a survey to understand why people may not have access to credit. Match each survey question to the specific type of credit market limitation it is designed to identify.
Designing a Survey Question for Credit Constraints
A survey designed to measure the extent of credit market limitations in a country asks two separate questions:
- 'In the past 12 months, did you apply for a loan and have your application rejected?'
- 'In the past 12 months, was there a time you needed a loan but chose not to apply because you believed your application would be rejected?' The survey finds that 6% of respondents answered 'Yes' to the first question, and 9% of respondents answered 'Yes' to the second question. Assuming no respondent answered 'Yes' to both questions, what is the most reasonable estimate of the percentage of the population that is credit constrained based on this data?
Critiquing a Survey Methodology for Credit Constraints
Evaluating Survey Question Design for Credit Constraints
A national survey on household finance provides the following data for a country:
- 15% of households applied for credit in the past 12 months.
- Of the households that applied for credit, one-third were denied.
- An additional 10% of all households reported that they needed credit but did not apply because they believed their application would be denied.
Based solely on this information, what is the most accurate estimate of the percentage of households in this country that are credit constrained?
Learn After
Evaluating Data Sources for Economic Indicators
What organization was responsible for conducting the 2019 surveys that provided data on indicators of credit market exclusion and constraints in the United States, as detailed in the 'Report on the Economic Well-Being of U.S. Households in 2019'?
Information regarding the percentage of a country's population that would be unable to cover their living expenses for three months after losing their main income source is typically collected by analyzing aggregated data directly from financial institutions' lending and deposit records.
An economist wants to study financial fragility by determining the percentage of households, across all income levels, that believe they would be denied a loan if they applied for one. Which of the following data collection methods would be most appropriate for this specific research goal?
Choosing a Data Source for Economic Research
Analyzing Data Collection Methods for Financial Behavior
An economic report from a nation's central bank uses a large-scale household survey to conclude that a large percentage of the population feels financially insecure and would have difficulty covering a small, unexpected expense. When evaluating the findings of this report, what is a primary advantage of this survey-based methodology compared to analyzing aggregated financial account data from banks?
Designing a Study on Household Financial Stability
A central bank publishes a report on household financial well-being based on a large-scale survey. The survey asks respondents questions like, 'If you lost your main source of income, could you cover your expenses for three months?' and 'Were you denied credit in the past 12 months?'. When critically assessing the findings of this report, which of the following represents a potential limitation of this survey-based approach?
Match each type of economic information with the primary data collection method most likely used to obtain it accurately.