Household Financial Resilience Measurement in Urban LMICs: A Scoping Review of Instruments (2018-2024)

Abstract

The COVID-19 pandemic, and the preceding exogenous shocks have exposed the vulnerability of urban populations to financial shocks, especially concerning food security. The estimation of financial resilience reveals which households are most susceptible to economic shocks, and therefore require interventions. And yet, despite the growing recognition of financial resilience as a critical factor in household economic stability, existing literature often lacks a consensus on the most effective measurement approaches, particularly in developing country contexts. To address this, the study investigated the most appropriate and robust method for measuring financial resilience in the context of urban Households (HHs), in Lower – Middle - Income Countries (LMICs). This was accomplished by identifying and evaluating the instruments used to measure financial resilience in published studies, and assessing the validity, reliability, and appropriateness.

The search for literature was conducted from several economic databases. A priori inclusion criteria determined the inclusion of peer-reviewed articles in English leading to the identification of 15 articles. The results reveal the absence of a standard instrument yet, and this may lead to inconsistent approaches. Furthermore, existing financial resilience tools, often rely on cross sectional data, thereby fail to capture its dynamic nature, potentially hindering accurate estimations Given that a majority of LMICs were hard hit by the pandemic, and they continue to suffer from diverse challenges that hinder socio-economic development, this is a notable concern. The study recommends to close this critical gap by developing and validating a standardized, multi-dimensional instrument for LMICs.