Theoretical and Empirical Analysis of Household Risk Preparation in Iran

In this article, the analysis and calculation of the Household Risk Preparation in Iran during 2000-2021 was discussed. For this purpose, following Foa (2014), four main components of the said index, including the household's access to financial resources, social support, human capital, and the economic capacity of the government, were considered. According to the conditions of Iran and the available data, Domestic credit to private sector (% of GDP) and the index of Strength of Legal Rights as components of household access to financial resources, the number of workers with wages and salaries and the amount of compensation payments to employees as components of social protection, average year Education and measles vaccination rate were considered as components of human capital, government debts and access to advanced health facilities as components of economic capacity of the government.The principal component analysis (PCA) method was used to weight the constituent components of the index. The results indicated that compensation payments to employees had the most weight and the number of workers with wages and salaries had the least weight in forming the index. Other variables affecting the index, in order of estimated weight, are Domestic credit to private sector, measles vaccination rate, the level of access to advanced health facilities, government debts, and the strength of legal rights.