Estimating the absolute wealth of households

• Type of Material: Article
• Authors: Daniel J. Hruschka, Arizona State University; Drew Gerkey, Oregon State University; Craig Hadley, Emory University
• Language: English
• Date: 2015-07-01
• Publisher: World Health Organization (WHO)
• Publication Version: Final Published Version
• Copyright Statement: © 2015 The authors; licensee World Health Organization.
• License: Creative Commons Attribution 3.0 IGO License
• Final Published Version (URL): http://dx.doi.org/10.2471/BLT.14.147082
• Title of Journal or Parent Work: Bulletin of the World Health Organization
• ISSN: 0042-9686
• Volume: 93
• Issue: 7
• Start Page: 483
• End Page: 490
• Grant/Funding Information: DG was supported by a grant from the United States National Science Foundation to the National Socio-Environmental Synthesis Center (DBI-1052875).; DJH acknowledges support from the United States National Science Foundation grant BCS-1150813, funded by the Programs in Cultural Anthropology, Social Psychology Program and Decision, Risk, and Management Sciences.
• Research Categories: Statistics; Sociology, Demography; Economics, General

Abstract

Objective: To estimate the absolute wealth of households using data from demographic and health surveys. Methods: We developed a new metric, the absolute wealth estimate, based on the rank of each surveyed household according to its material assets and the assumed shape of the distribution of wealth among surveyed households. Using data from 156 demographic and health surveys in 66 countries, we calculated absolute wealth estimates for households. We validated the method by comparing the proportion of households defined as poor using our estimates with published World Bank poverty headcounts. We also compared the accuracy of absolute versus relative wealth estimates for the prediction of anthropometric measures. Findings: The median absolute wealth estimates of 1 403 186 households were 2056 international dollars per capita (interquartile range: 723–6103). The proportion of poor households based on absolute wealth estimates were strongly correlated with World Bank estimates of populations living on less than 2.00 United States dollars per capita per day (R2 = 0.84). Absolute wealth estimates were better predictors of anthropometric measures than relative wealth indexes. Conclusion: Absolute wealth estimates provide new opportunities for comparative research to assess the effects of economic resources on health and human capital, as well as the long-term health consequences of economic change and inequality.