On the Measurement of Emergency Savings
*Names in bold indicate Presenter
This study examines how variations in the form of questions used to measure household savings or reserve funds may generate consistent or divergent findings. Using an online study sample, this paper tests a series of items that measure small dollar emergency savings and the capacity to cope with financial shocks. We include liquidity-type questions from established surveys, along with validated scales of food security and financial status to serve as comparison measures. We randomly assign respondents to report on their self-rated ability to acquire between $500 and $2,000. We also vary the time period from five days to 30 days. We correlate these measures across respondents, as well as within respondents to other measures that proxy for financial status. We provide a summary of various approaches to develop an ideal set of questions that can be used to reliably measure the general concept of “emergency savings” and offer insights into how this set of measures can be used in future research and policy evaluations.