The Performance of a Consumption Augmented Asset Index in Ranking Households and Identifying the Poor
Asset ownership indices are widely used as inexpensive proxies for consumption. This paper shows that these indices can be augmented using dichotomous indicators for consumption, which are equally easy to obtain. The paper uses multiple rounds of L...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/882101520515555525/The-performance-of-a-consumption-augmented-asset-index-in-ranking-Households-and-Identifying-the-Poor http://hdl.handle.net/10986/29456 |
| Summary: | Asset ownership indices are widely used
as inexpensive proxies for consumption. This paper shows
that these indices can be augmented using dichotomous
indicators for consumption, which are equally easy to
obtain. The paper uses multiple rounds of Living Standards
Measurement Study surveys from Malawi, Uganda, Rwanda,
Tanzania, and Ghana to construct indices with different item
subcategories and performs a meta-analysis comparing the
indices to per capita consumption. The results show that the
standard asset indices, which are derived from durable
ownership and housing characteristic indicators, perform
well in urban settings. Yet, in rural samples and when
identifying the extreme poor, household rankings and poverty
classification accuracy can be meaningfully improved by
adding indicators of food and semi-durable consumption. The
study finds small improvement from using national weights in
urban samples but no improvement from using alternative
construction methods. With most of Africa’s poor
concentrated in rural areas, these are important insights. |
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