A Generalized Framework for the Assessment of Household Financial Vulnerability

Household financial fragility has received considerable attention following the globalfinancial crisis, but substantial gaps remain in the analytical underpinnings of householdfinancial vulnerability assessment, as well as in data availability. This paper aims atintegrating the contributions in the literature in a coherent fashion. The study proposes alsoanalytical and estimation extensions aimed at improving the quality of estimates andallowing the assessment of household financial vulnerability in presence of data limitations.The result of this effort is a comprehensive framework, that has wide applicability to bothadvanced and developing economies. For illustrative purposes the paper includes a detailedapplication to one developing country (Namibia)