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Title: Water, Walls and Bicycles: Wealth Index Composition Using Census Microdata

Citation Type: Working Paper

Publication Year: 2014

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Abstract: This research aims to develop a valid and consistent measure for socioeconomic status at the household level using census microdata from developing countries available from the Integrated Public Use Microdata Series - International (IPUMS-I), the world's largest census database. We use principal components analysis to compute a wealth index based on asset ownership, utilities, and dwelling characteristics. The validation strategies include comparing our proposed index with the widely used Demographic and Health Survey (DHS) wealth indices and verifying socioeconomic gradients on school enrollment and educational attainment. Graphical analysis of kernel distributions suggests that our measure is valid. Results also show a consistently positive effect of the wealth index on education outcomes. Furthermore, using a stepwise elimination procedure, we identify conditions to produce an internally consistent asset index given that the availability of indicators varies considerably for census microdata. As an important practical implication of results, the proposed methodology suggests which assets are more important in determining household socioeconomic status.

Url: https://pop.umn.edu/sites/pop.umn.edu/files/wp-2014-7.pdf

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Authors: Davila, Rodrigo, L; McCarthy, Aine, S

Series Title: MPC Working Paper Series

Publication Number: 2014-7

Institution: MPC

Pages: 38

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Data Collections: IPUMS International

Topics: Natural Resource Management

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