Composite Indicator: Risk & Vulnerability

In order to better understand how neighborhood environments contribute to resident well-being and social mobility, the Price Center for Social Innovation created two custom indicators.  These indicators were developed by combining specific variables to create comprehensive measurements of two key dimensions of neighborhood opportunity: Economic Opportunity and Risk & Vulnerability.

The living standards of a community are typically measured using the poverty level of that community.  However, a wide array of factors beyond just poverty levels shape the lives of people in a community and the opportunities available to them. 

In an effort to capture more of these factors affecting living standards, the Price Center has developed a Risk & Vulnerability Index measuring the conditions that negatively affect the quality of life in a community and, among other impacts, limit economic opportunity.  The Risk & Vulnerability Index was created by taking into account four key areas of risk and vulnerability at the neighborhood level: Environment, Food Access, Health, and Public Safety.

The index is measured from 0 to 1, with 0 indicating that an area has low risk and vulnerability, and 1 meaning an area has high risk and vulnerability. 

Through a systematic review of academic contributions on risk and vulnerability, a number of variables were identified at the neighborhood level. These variables were then analyzed through a statistical technique called factor analysis, which was conducted for census tracts with a population greater than 1,000.

This analysis yielded a smaller group of variables that ‘loaded’ together - that is, presented the highest degree of correlation with the underlying factor of risk and vulnerability, and thus could be grouped into an index to measure it. The variables selected for the Risk & Vulnerability Index fall into four main categories: Environment, Food Access, Health, and Public Safety.