Abstract
An index of Perceived Economic Well-Being is constructed using factor analysis and tested for reliability and validity. The index is composed of (a) perceived income adequacy, and satisfaction with (b) current total household income, (c) amount of money your family is able to save, (d) amount of current debt, (e) level of consumption, (f) amount of household net worth, and (g) resources available to meet a financial emergency. The index is used in regression analysis. Results show that financial managers perceive economic well-being more favorably if they are more satisfied with resources and with the current level of living, view the present financial situation as better compared to 5 years ago, save on a regular basis for goal(s), and have a higher income. Financial managers who report more frequent financial problems, worry more about where money would come from to pay bills, and more frequently make only minimum payments on charge accounts perceive economic well-being less favorably.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Ackerman, N., & Paolucci, B. (1983). Objective and subjective income adequacy: Their relationship to perceived life quality measures.Social Indicators Research, 12, 25–48.
Ary, D., Jacobs, L. C., & Razavieh, A. (1972).Introduction to research in education. New York: Holt, Rinehart, and Winston.
Bauer, J. W., & Dunsing, M. M. (1983). Determinants of wife's estimate of and satisfaction with amount of family net worth. In M. M. Dunsing (Ed.),Proceedings of the Symposium on Perceived Economic Well-Being (pp. 86–105). Urbana-Champaign: University of Illinois, Agricultural Experiment Station.
Blalock, H. M. (1979).Social statistics (2nd ed. rev.). New York: McGraw-Hill.
Borgatta, E. F., & Bohrnstedt, G. W. (1981). Level of measurement: Once over again. In G. W. Bohrnstedt & E. F. Borgatta (Eds.),Social measurement: Current issues (pp. 23–37). Beverly Hills, CA: Sage.
Campbell, A., Converse, P. E., & Rodgers, W. L. (1976).The quality of American life. New York: Russell Sage Foundation.
Chow, G. C. (1960). Test of equality between sets of coefficients in two linear regressions.Econometrica, 28, 591–605.
Davis, J. S. (1945). Standards and content of living.American Economic Review, 35, 1–15.
Davis, E. P., & Helmick, S. A. (1983). Composite measures of financial satisfaction: An analysis of two indices. In M. M. Dunsing (Ed.),Proceedings of the Symposium on Perceived Economic Well-Being (pp. 27–39). Urbana-Champaign: University of Illinois, Agricultural Experiment Station.
Fletcher, C. N., & Lorenz, F. O. (1985). Structural influences on the relationship between objective and subjective indicators of economic well-being.Social Indicators Research, 16, 333–345.
Frank, R. E., Massy, W. F., & Morrison, D. G. (1965). Bias in multiple discriminant analysis.Journal of Marketing Research, 2, 250–258.
Hair, J., Anderson, R., Taxtham, R., & Grablowsky, B. (1984).Multivariate data analysis. New York: Macmillan.
Kim, J.-O. (1975). Factor analysis. In N. H. Nie, C. H. Hull, J. G. Jenkins, K. Steinbrenner, & D. H. Bent (Eds.),Statistical package for the social sciences (2nd ed.) (pp. 468–514). New York: McGraw-Hill.
Mammen, S., Helmick, S. A., & Metzen, E. J. (1983). Factors affecting perceived adequacy of income. In M. M. Dunsing (Ed.),Proceedings of the Symposium on Perceived Economic Well-Being (pp. 40–50). Urbana-Champaign: University of Illinois, Agricultural Experiment Station.
Mendenhall, W., & Sincich, T. (1986).A second course in business statistics: Regression analysis (2nd ed.). San Francisco: Dellen.
Olson, D. H., Portner, J., & Bell, R. (1982). FACES II: Family adaptability and cohesion evaluation scales. In D. H. Olson, H. I. McCubbin, H. Barnes, A. Larsen, M. Muxen, & M. Wilson (Eds.),Family inventories: Inventories used in a national survey of families across the family life cycle (pp. 8–24). St. Paul: University of Minnesota, Family Social Science.
Olson, D. H., Portner, J., & Lavee, Y. (1985).FACES III. St. Paul: University of Minnesota, Family Social Science.
Rudd, N. M. (1983). Perceived economic well-being and household characteristics: A canonical analysis. In M. M. Dunsing (Ed.),Proceedings of the Symposium on Perceived Economic Well-Being (pp. 51–63). Urbana-Champaign: University of Illinois, Agricultural Experiment Station.
Slusher, B. J., Helmick, S. A., & Metzen, E. J. (1983). Perceived economic well-being: The relative impact of value concordance and resource adequacy. In M. M. Dunsing (Ed.),Proceedings of the Symposium on Perceived Economic Well-Being (pp. 14–26). Urbana-Champaign: University of Illinois, Agricultural Experiment Station.
Smith, G. (1985).Macroeconomics. New York: W. H. Freeman.
SPSS. (1988).SPSS-X, User's Guide (3rd ed.). Chicago: SPSS.
Technical Committee for NC-182. (1982).Family resource utilization as a factor in determining economic well-being of rural families: A proposal. Unpublished manuscript.
Trave-Danielewicz, A. J. (1978). Determinants of the wife's perception of income adequacy (Doctoral dissertation, University of Illinois, Urbana-Champaign, 1978).Dissertation Abstracts International, 39, 164A.
U.S. Department of Commerce, Bureau of the Census. (1988).County and city data book: A statistical abstract supplement. Washington, DC: U.S. Government Printing Office.
Walson, C. O. (1991). Determinants of financial manager's perception of rural household economic well-being: An analysis of a composite measure (Doctoral dissertation, University of Illinois, Urbana-Champaign, 1991).Dissertation Abstracts International, 52, 4019A.
Wilhelm, M., & Iams, D. R. (1986). Measures of economic well-being: Husband and wife consensus. In K. P. Schnittgrund (Ed.),Proceedings of the 32nd Annual Conference of the American Council on Consumer Interests (pp. 144–150). Columbia: University of Missouri.
Yuen, J. C. (1976). Determinants of wife's perception of economic well-being among “disadvantaged” families (Doctoral dissertation, University of Illinois, Urbana-Champaign, 1977).Dissertation Abstracts International, 37, 5009B.
Author information
Authors and Affiliations
Additional information
Preparation of this research was supported in part by the Illinois Agricultural Experiment Station. Data were collected in conjunction with the cooperative regional research project NC-182, “Family Resource Utilization as a Factor in Determining Economic Well-Being of Rural Families.” Cooperating states are Arizona, California, Illinois, Indiana, Iowa, Kansas, Michigan, and Minnesota.
He received his Ph.D. from the University of Illinois in 1991 with Dr. Fitzsimmons as advisor. His current research interest is economic well-being.
She received her Ph.D. from the University of Illinois; her current research interests include gender roles, family financial management, and economic well-being.
Rights and permissions
About this article
Cite this article
Walson, C.O., Fitzsimmons, V.S. Financial manager's perception of rural household Economie Well-Being: Development and testing of a composite measure. J Fam Econ Iss 14, 193–214 (1993). https://doi.org/10.1007/BF01022177
Issue Date:
DOI: https://doi.org/10.1007/BF01022177