How the Ones in Need Solve Financial Problems in Times of Crisis? The
Implication for Government Support Programs
Authors: Prossinger Hermann , Geciova Nikola , Horvath Miroslav , Binter Jakub , Cempirkova Eliska 
Published: July 2023

After the COVID-19 pandemic ended the war between Ukraine and Russia
resulted in further price increases and a decrease in the quality of living
of many Europeans. Many groups of citizens must be able to survive on meagre
resources — despite being located thousands of kilometers from the war-zone.
The two most affected groups are senior citizens and single parents who
oftentimes do not have sufficient savings. The government provides financial
support (e.g. housing allowance) to those in need after their successfully
filling out application forms and proving their crisis situations. These are
reviewed for eligibility by the Labor Employment Office. There are several
problems inherent in this bureaucratic procedure. Among these are: complex
jurisdictional language, external reference requirements, and lengthy forms.
All these force — willingly or unwillingly — the individuals to either avoid
or fail the application process. In order to investigate statistics aspects
of the avoidance aspect of this state of affairs, we collected data from
Czech citizens via an online questionnaire at the end of 2022. The questions
were specifically aimed at understanding the potential applicants'
mechanisms of dealing with their financial crises. We queried respondents'
ratings to nine queries about their financial strategies (taking out a loan,
use of savings, etc.) and two about their income. All responses were
categorical variables.We constructed a contingency matrix and performed a
correspondence analysis. This method shows associations, replacing the
often-times used erroneous approach of looking for correlations (which do
not exist for categorical variables). Furthermore, we can find an a priori
unknown number of associations and the fraction of statistical noise in the
contingency matrix. We use a clustering algorithm ('spectral' clustering) to
find the number of possible associations and construction of concave hulls
to aid in analyzing these.We find: (a) the associations explain 91.9% of the
square of the Frobenius norm of the contingency matrix; (b) nine queries
associate (in four clusters) for certain response categories; (c) two
queries do not associate (one is independent of response categories); and
(d) one query associates with only one response query.The implications of
these associations are as follows: (a) all respondents intend to decrease
their outlays; (b) those who earn between 20 and 30 thousand CZK are
hesitant to ask for government support; (c) the participants would rather
not borrow money from family, bank, nor sell their valuables; (d) the
rejection of possible non-bank loans associates with the rejection of
selling a property; (e) reliance on savings does not associate with any
other query, nor does total household income — nor does finding an extra
job. Application of our findings are twofold. First, we see that the
strongest statistical signal does not provide support for an association
between personal or family income and the proffered solution of government
support. Second, the associations we found indicate a crucial and ominous
rejection of the Czech government's strategy and expectations. Specifically,
we suggest a remedial strategy of matching the application process with the
linguistic accessibility of low-income citizens.