| A dimension of well-being, economic security, was analyzed in this study taking into account household income and characteristics. Economic security was defined as the household's ability to sustain a given level of consumption in the case of an economic emergency; specifically, loss of income. Measures of two different kinds of economic security, adjusted and nonadjusted, were constructed from financial assets and household liabilities. Adjusted economic security was defined as the length of time (measured in months) a household can sustain a socially determined minimum consumption level drawing only on financial assets. Nonadjusted economic security was defined as the length of time a household can sustain its own consumption standard.;Data were taken from the 1988 Consumer Expenditure Survey of Bureau of Labor Statistics, and 2148 households, excluding rural households and households headed by elderly householders, were used to test hypotheses concerning the economic security of American households.;The general level and distribution of economic security of several population groups was investigated. Then, multiple regression was performed to test three hypotheses regarding the relationship between economic security and five independent variables: household income and four household characteristics. Specifically, it was of interest to examine whether income and economic security yield the same results in terms of the measurement of household well-being.;The empirical results showed a very low level of economic security. Households at the median can not sustain their own consumption standard for even one month from their financial assets. Holding income constant, the households with a younger, less-educated, nonwhite, and/or male householder are most likely to be destitute when earned income ceases. Although income and economic security tend to be positively correlated, estimates of well-being of households based only on income differ from estimates based on economic security. In order to examine the whole picture of household well-being, therefore, the security component (level of assets) as well as the adequacy component (level of income) should be taken into account. |
