Marketplace and Edison Research developed the Economic Anxiety Index as a tool to help describe how the economy feels on a personal level.
What is it?
In its simplest form, the Economic Anxiety Index is a number that describes a person’s financial stress. It’s on a scale of zero to 100, and it relates to an individual’s economic situation – the “personal economy,” as we often call it on Marketplace. The higher the number, the more stressed out someone is.
How is it calculated?
The Marketplace-Edison Research poll has dozens of questions about how the macroeconomy feels on a micro level, and the Economic Anxiety Index involves the answers to 12 of those questions. The questions come from three broad categories:
- General anxiety – 50 percent. Half the score relates to general concerns about money – how financially secure people feel, how often people feel anxious about their financial situation and whether people are losing sleep over their finances.
- Saving and expenses – 30 percent. The next group of questions relates to fear about meeting monthly housing costs, car payments and student loans; fear about having money set aside for retirement and college savings; and fear about facing an unexpected medical bills
- Job security – 20 percent. The final category for the score comes from answers to questions about employment – how much people fear losing their job in the next year, and how confident they would feel about their job prospects if they did become unemployed.
How can it be used?
The index has two main uses, one immediate and one that develops over time.
First, the index is a tool for comparing how different demographic groups are experiencing the economic recovery. It reveals telling divisions in the current economy; for example, hourly workers have much more anxiety than those paid a salary, and the nation’s renters are more financially stressed than those who hold mortgages.
In the longer term, as Marketplace and Edison Research continue to survey Americans’ feelings about the economy, the Economic Anxiety Index will be an indicator of how the overall economic mood is changing. And in the context of the 2016 election campaign, it will help explain how economic concerns are motivating voter behavior.
Read more about our latest results, and how we conducted the surveys, here.