Peru | Financial health shapes consumer welfare

Summary

The ability to cope with financial shocks from one's own resources is called financial vulnerability. It is measured as the period of time that individuals can survive by covering their needs if they lose their main source of income and without using credit.

Key points

• Key points:
• Financial vulnerability shows an inverse relationship with financial health; if financial health is low, the probability of being highly vulnerable increases dramatically.
• If the level of education and/or financial literacy increases, the financial vulnerability decreases.
• People living in rural areas are more financially vulnerable than those living in urban areas.
• Women and younger people are at greater risk of being financially vulnerable.

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