Measuring Financial Wellbeing

The Melbourne Institute: Applied Economic and Social Research, along with colleagues from the Department of Finance at The University of Melbourne (UoM), are collaborating with Commonwealth Bank Australia (CBA) to develop and analyse scale measures of the financial wellbeing of CBA’s customers and Australians generally.

The collaboration is developing its outcome measures (“scales”) of financial wellbeing with data from customers’ financial records and self-reported data from customers. The scales will help CBA, other organisations and policymakers to design policies, products and services to improve Australians’ financial wellbeing.

Researchers have previously considered various aspects of financial wellbeing, but no definition or metric has been universally adopted. In addition, no financial wellbeing scale combines objective data from customer records with self-reported information from personal responses.

In August 2017, CBA conducted an online survey of nearly 6,000 customers that asked about their financial wellbeing and their financial and personal circumstances. The CBA/UoM team obtained consent to link the survey responses to CBA customer records of people’s financial positions and financial transactions and is using these data to develop many novel measures of customers’ financial wellbeing.

The team is quantitatively analysing the combined survey and customer-record data to study how household circumstances, economic events, and personal behaviours affect financial wellbeing.

Reports

Developing a short form version of the Commonwealth Bank - Melbourne Institute Reported Financial Wellbeing Scale, Technical Report 5, March 2020


Improving the Commonwealth Bank of Australia - Melbourne Institute Observed Financial Wellbeing Scale, Technical Report No. 3, February 2019

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Using Survey and Banking Data to Understand Australians' Financial Wellbeing, Technical Report No. 2, July 2018

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Using Survey and Banking Data to Measure Financial Wellbeing, Technical Report No. 1, March 2018

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Financial Wellbeing Scales

How to use the Reported Financial Wellbeing Scale

How to create the Observed Financial Wellbeing Scale

Before using the scales

The Financial Wellbeing Scales are the result of collaboration between the Melbourne Institute: Applied Economic & Social Research at The University of Melbourne and the Commonwealth Bank of Australia. Both organisations have made the specifications of the Scales available for use by others to improve understanding and measurement of financial wellbeing.

If you use or reference the Scales, we ask that you refer to them as the “Melbourne Institute Financial Wellbeing Scales” or “MI Financial Wellbeing Scales” and cite the initial report (e.g., cite Comerton-Forde et al., 2018) with each use. If you use the methodology in a different scale or modify it, we ask that you give your other / modified scale a different name. If you would like to apply to join our Financial Wellbeing Community of Practice to gain and share insights on using the Scales, to connect with a non-competing organisation that is using the Scales or to share your use of the Scales in the interest of research and education, please email melb-Inst@unimelb.edu.au with your organisation’s name and your contact details so we can get in touch with you. By downloading these Scales, you agree that you will only use them for your organisation’s internal, non-commercial purposes (e.g., to monitor the FWB of your customers). If you want to use the Scales to create a commercial product or service for individuals, industry clients and/or practitioners (e.g., to provide individual FWB assessments as part of a bundled service, or to create an FWB score or index to sell to the financial services industry), then please contact us to discuss licensing options.

Neither the Commonwealth Bank of Australia nor the Melbourne Institute shall be liable for any errors or omissions, or for any misinterpretation or misuse of the Financial Wellbeing Scales, including the Observed Financial Wellbeing Scale and the Reported Financial Wellbeing Scale, and the methodology. All information is provided “as is”, without any warranties (express or implied) as to completeness, accuracy or currency and does not constitute financial advice.

Investigators

Ferdi Botha, Melbourne Institute: Applied Economic & Social Research

Professor John De New, Melbourne Institute: Applied Economic & Social Research

Professor Carsten Murawski, Department of Finance, The University of Melbourne

Nicolás Salamanca, Melbourne Institute: Applied Economic & Social Research

Sam Tsiaplias, Melbourne Institute: Applied Economic & Social Research

Chief investigator

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