EquityTool: Released July 12, 2018
Source data: Argentina MICS 2012
|Question||Option 1||Option 2|
|Q1||Does your household have:… a computer?||Yes||No|
|Q3||… a washing machine?||Yes||No|
|Q4||… a microwave?||Yes||No|
|Q5||… a CD player?||Yes||No|
|Q6||… a film camera/digital camera?||Yes||No|
|Q7||… a telephone (landline)?||Yes||No|
|Q8||… DVD player?||Yes||No|
|Q9||… a car from the year 2000 or later?||Yes||No|
|Q10||… a refrigerator (without a freezer)?*||Yes||No|
|Q11||Does any member of your household have a credit card?||Yes||No|
|Q12||What is the main material of the floors in your home?||Ceramic, tile mosaic, marble, wood, or carpet||Other|
|Q13||Does your toilet drain…||To the public sewer network?||To somewhere else?|
*Respondents who possess a refrigerator with a freezer should answer “No” to Q10.
The standard simplification process was applied to achieve high agreement with the original wealth index. Kappa was greater than 0.75 for the national index. Details on the standard process can be found in this article. The data used to identify important variables comes from the factor weights derived from the reconstruction of the MICS Wealth Index using analytical syntax provided to Metrics for Management by UNICEF.
The MICS wealth index for Argentina is constructed using a slightly different approach than the DHS Wealth Index and other MICS Wealth Indices. Typically, factor weights and wealth scores are derived separately in urban and rural areas, and then combined into a national score using linear regression. In Argentina, the MICS survey was only conducted in urban areas, where 93% of the country’s population resides. Thus, some variables that related to wealth very differently in rural areas than in urban areas, such as livestock ownership, were not included in the original wealth index. The MICS Wealth Index for Argentina is shorter than the average full wealth index, and presents a national wealth index based upon the urban population only.
Level of agreement:
Respondents in the original dataset were divided into three groups for analysis – those in the 1st and 2nd quintiles (poorest 40%), those in the 3rd quintile, and those in the 4th and 5th quintiles (richest 40%). After calculating their wealth using the simplified index, they were again divided into the same three groups for analysis against the original data in the full MICS. Agreement between the original data and our simplified index is presented above.
What does this mean?
When shortening and simplifying the index to make it easier for programs to use to assess equity, it no longer matches the original index with 100% accuracy. At an aggregate level, this error is minimal, and this methodology was deemed acceptable for programmatic use by an expert panel. However, for any given individual, especially those already at a boundary between two quintiles, the quintile the EquityTool assigns them to may differ to their quintile according to the original MICS wealth index.
The graph below illustrates the difference between the EquityTool generated index and the full MICS wealth index. Among all of those people (20% of the population) originally identified as being in the poorest quintile, approximately 83% are still identified as being in the poorest quintile when we use the simplified index. However, approximately 17% of people are now classified as being in Quintile 2. From a practical standpoint, all of these people are relatively poor. Yet, it is worthwhile to understand that the simplified index of 13 questions produces results that are not identical to using all 38 questions in the original survey.
The following table provides the same information on the movement between national quintiles when using the EquityTool versus the original DHS wealth index:
|EquityTool National Quintiles|
|Quintile 1||Quintile 2||Quintile 3||Quintile 4||Quintile 5||Total|
|Original DHS National Quintiles||Quintile 1||16.6%||3.3%||0.1%||0.0%||0.0%||20%|
Data interpretation considerations:
Metrics for Management provides technical assistance services to those using the EquityTool, or wanting to collect data on the wealth of their program beneficiaries. Please contact firstname.lastname@example.org and we will assist you.
 From povertydata.worldbank.org, reporting Poverty headcount ratio at $1.90/day at 2011 international prices.