Hacker News Reader

Comment by bzbarsky | Hacker News Reader

That "47% can't sustain an unexpected $400 expense" conclusion does not follow from the actual survey data involved, as far as I can tell. See https://www.cato.org/blog/it-true-40-americans-cant-handle-4... for some details (yes, you may not trust the source), or the actual response data at https://www.federalreserve.gov/publications/2018-appendix-b-... questions EF3, EF5B, EF6B if you want to do your own analysis. The only way to get numbers in the range "47%" out of that data is to add up _all_ the choices other than "put it on my credit card, which I pay off in full" and "just pay cash" in the EF3 responses. But that's an odd thing to do, given that respondents were instructed to select all the methods they would use, not just one method.

View on HN

Fair point, appreciate your digging out the source. Interpretation of survey responses is ... challenging.

The question works well to answer the question "what sources of emergency financing do you have access to?" It's less well-structured to answer "could you pay for an emergency expense without either selling off nonfinancial assets or incurring long-term usurious debt".

Since multiple selections apply, adding percentages isn't applicable. Though 50% of respondents do mention paying with current cash savings --- that could apply to all or part of an expense.

I do read "unable" and "by selling something" as mutually exclusive, which suggests a 20% portion of the population at least who'd be severely stressed by such an incident.

I really wouldn't assume those are mutually exclusive, based on my experience with survesy, but I agree that 20% is likely smaller than the actual number here. And 14% is an absolute lower bound which assumes that no one checked both "charge and pay off" and "pay cash", which is clearly an unrealistic assumption.

Even 14% is much higher than I would wish for answers to this sort of question, of course.

Anyway, if I had to read the tea leaves I would guess the "real" number is somewhere in the ~30% range based on EF5A and EF5B (EF5B was only asked if the respondent answered they would pay all bills in full for EF5A). That is, 22% of the respondents are having trouble paying existing bills in full (though what that means is another complex question, I bet) and another 11% (14% of 78%) would have trouble doing it if they had an unexpected $400 expense. That gets us to 33%; some of those might be able to recover from the $400 expense over the course of a month or three by temporarily running a small credit card balance and then paying it off, but it's not going to be too many I expect.

Which is pretty horrible. Not 47% horrible, but horrible.

Reply on news.ycombinator.com