Approaches and Alternatives to the Wealth Index to Measure Socioeconomic Status Using Survey Data: A Critical Interpretive Synthesis

Abstract

Monitoring progress towards the Sustainable Development Goals by 2030 requires the global community to disaggregate targets along socioeconomic lines, but little has been published critically analyzing the appropriateness of wealth indices to measure socioeconomic status in low-and middle-income countries. This critical interpretive synthesis analyzes the appropriateness of wealth indices for measuring social health inequalities and provides an overview of alternative methods to calculate wealth indices using data captured in standardized household surveys. Our aggregation of all published associations of wealth indices indicates a mean Spearman's rho of 0.42 and 0.55 with income and consumption, respectively. Context-specific factors such as country development level may affect the concordance of health and educational outcomes with wealth indices and urbanrural disparities can be more pronounced using wealth indices compared to income or consumption. Synthesis of potential future uses of wealth indices suggests that it is possible to quantify wealth inequality using household assets, that the index can be used to study SES across national boundaries, and that technological innovations may soon change how asset wealth is measured. Finally, a review of alternative approaches to constructing household asset indices suggests lack of evidence of superiority for count measures, item response theory, and Mokken scale analysis, but points to evidence-based advantages for multiple correspondence analysis, polychoric PCA and predicted income. In sum, wealth indices are an equally valid, but distinct measure of household SES from income and consumption measures, and more research is needed into their potential applications for international health inequality measurement.

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“…Regarding the difficulties in estimating SES with income and consumption, past studies have focused on developing proxy indicators. In global health research, the wealth index has been proposed as one of the most important key proxy indicators [36]. For example, some researchers have applied the wealth index to investigate subjects such as malnutrition [37], prenatal care [38], malaria transmission [39], reproductive health [40], and poverty [41].…”

Children with Developmental Disabilities in Low- and Middle-Income Countries: More Neglected and Physically Punished

“…Additionally, precise data measuring socioeconomic statuses of each household is also not available in MICS. Instead, household wealth was used, which is a valid measure of household SES in LMICs [ 94 ]. Nonetheless, with urban-rural disparities and different standards of health and educational outcomes in LMICs compared to higher-income countries, more comprehensive economic and development factors may need to be implemented in future studies in order to allow for global comparisons.…”

Geographic Targeting and Normative Frames: Revisiting the Equity of Conditional Cash Transfer Program Distribution in Bolivia, Colombia, Ecuador, and Peru

“…3 Age-standardized weight-for-age and height-for-age z-scores using DHS standards based on WHO Anthro definitions were used to calculate prevalence of underweight and stunting [ 44 , 45 ]. Finally, household wealth indices were calculated for non-DHS household surveys using the standard DHS principal components analysis method [ 46 – 48 ].…”

“…In part, this is because quantifying SES is more complicated than simply asking for annual income in many low-and middle-income countries. Factors such as informal employment and large fluctuations in income from month to month have led many researchers, and in turn policymakers, to prefer household consumption or wealth indices as more reliable measures of SES [19][20][21]. Moreover, policymakers must weigh the relative importance of both absolute and relative inequalities measured by each of these SES measures.…”