This paper examines racial
and ethnic differences in consumer financial well-being as a dimension of
marketplace inclusion and trust. Using nationally representative data from the
Federal Reserve’s Survey of Household Economics and Decision Making (SHED) from
2017 to 2021, the study investigates whether racial and ethnic disparities in
reported financial well-being can be explained by income, education, and other
household characteristics. Results show that higher income and higher education
increase the likelihood that households report doing at least okay financially.
However, meaningful racial and ethnic gaps remain, especially for Black and
Hispanic households relative to White households. Additional SHED measures of
perceived financial progress reveal that Black and Hispanic respondents are
more likely than White respondents to report improvement over the prior year,
and relative to their parents, even as they report lower current financial
well-being. Findings suggest that consumer financial well-being has both
positional and directional components and that racial and ethnic disparities
persist even when objective resources are similar. The study advances research
on consumer financial well-being by reframing it as an experiential marketplace
outcome shaped not only by income and education, but also by confidence,
access, and trust in financial institutions and economic opportunity.
