EquityTool released: October 12, 2021

Source data: DHS 2015

Previous version released: December 9, 2015

# of survey questions in original wealth index: 30

# of variables in original index: 101

# of survey questions in EquityTool: 14

# of variables in EquityTool: 15

Questions:

Technical notes:

The standard simplification process was applied to achieve high agreement with the original wealth index. Kappa was greater than 0.75 for the national and urban indices. Details on the standard process can be found in this article. The data used to identify important variables comes from the factor weights released by ICF.

While determining which wealth index variables to retain for use in this EquityTool a number of discrepancies were discovered between how variables were described in the Colombia 2015 DHS report, the factor weights spreadsheet, and in the data itself. While all of these inconsistencies could be accounted for and did not appear to distort the final weights applied to each variable, the decision was made to conduct  a principal components analysis of all original wealth index variables to confirm the validity of the original analysis. This analysis indicated that the original wealth index’s asset variable scores were valid and could be used to create this EquityTool. Additionally, during the course of the creation of this EquityTool, the tool demonstrated a requisite minimum level of agreement with the original wealth index after adding ll variables. However, an additional four variables were added in order to improve the tool’s ability to discriminate between the upper two wealth quintiles in the urban-only version of the tool.

Level of agreement:

Respondents in the original dataset were divided into 3 groups – those in the 1^st and 2^nd quintiles (poorest 40%), those in the 3^rd quintile, and those in the 4^th and 5^th quintiles (richest 40%). After calculating their wealth using the simplified index, they were again divided into 3 groups. 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 DHS wealth index.

The graph below illustrates the difference between the EquityTool generated index and the full DHS wealth index. Among all of those people (20% of the population) originally identified as being in the poorest quintile, approximately 90% are still identified as being in the poorest quintile when we use the simplified index.  However, approximately 10% 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 14 questions produces results that are not identical to using all 30 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:

The following graph provides information on the movement between urban quintiles when using the EquityTool versus the original DHS wealth index:

The following table provides the same information on the movement between urban quintiles when using the EquityTool versus the original DHS wealth index:

Data interpretation considerations:

1. This tool provides information on relative wealth – ‘ranking’ respondents within the national or urban population. The most recent available data from the WorldBank indicates that 4.9% of people in Colombia live below $1.90/day and 12.7% below $3.20/day.¹ This information can be used to put relative wealth into context.
2. People who live in urban areas are more likely to be wealthy. In Colombia, 26% of people living in urban areas are in the richest national quintile, compared to only 0.24% of those living in rural areas.¹
   1. If your population of interest is predominantly urban, we recommend you look at the urban results to understand how relatively wealthy or poor they are, in comparison to other urban dwellers.
   2. If the people you interviewed using the EquityTool live in rural areas, or a mix of urban and rural areas, we recommend using the national results to understand how relatively wealthy or poor they are, in comparison to the whole country.
3. Some departments in Colombia are wealthier than others. It is important to understand the country context when interpreting your results.
4. In most cases, your population of interest is not expected to be equally distributed across the five wealth quintiles. For example, if your survey interviewed people exiting a shopping mall, you would probably expect most of them to be relatively wealthy.

Changes from the previous EquityTool

 We released an EquityTool on 9 December 2015 which compared user data to a benchmark of 2010.  A new source survey, the Colombia 2015 DHS survey has since then been released, and allows us to benchmark results to a more recent population.  This is important, because wealth generally increases over time, and comparing your respondents to an old benchmark population will lead to over-estimating the relatively wealthy in your survey.  The new EquityTool was generated using the exact same methodology as the previous version, and in generating the new EquityTool, no attempt was made to account for the fact that a previous version existed. In other words, we did not explicitly try to keep the same questions or response options as the previous tool.

For those who have not previously conducted an EquityTool based study in Colombia, the remainder of this section is not particularly relevant.  For those who have used the previous EquityTool, you may be interested to know how the two versions compare.

Practical considerations for users of the previous EquityTool

Comparing the results of surveys that used the previous EquityTool against those that use the current EquityTool is difficult. It will not always be clear whether any difference is because of actual differences in the wealth level of the respondents or because the EquityTool has changed.

The technical comparison section below, particularly the 3^rd comparison, illustrates how quintile results compare when using the previous EquityTool and the current one. Generally, there is a partial shift down in quintiles when using a more recent EquityTool. In other words, the current EquityTool will usually put some respondents into a lower quintile than the previous one would.

It is generally best to use the current version of the EquityTool, since it will give a more accurate quintile estimates. If you are currently collecting data, it is best to continue to use the previous tool.  Note that if you have created a survey in the EquityTool web application using the previous EquityTool, that survey will continue to use the previous EquityTool.

If conducting a follow-up survey to a baseline that used the previous EquityTool, and the most important result is change from the baseline, it may be preferable to continue to use the previous EquityTool for comparability. If you need to do this, please contact us at support@equitytool.org.

Technical comparison between the current and previous EquityTool

All of the questions and response options for the previous EquityTool are found in the new Colombia DHS 2015 source data. This makes comparison between the two versions of the EquityTool, and two different data sources, easier.

The comparison will be assessed in 3 different ways, described below.

1. Using the same 13 questions and response options, and scoring system as in the previous EquityTool, with two different benchmark populations.

This analysis simulates results if the only thing which changes is the benchmark against which respondents are compared. In the five years between the two source data studies, more people have acquired assets that are indicative of wealth. In the graph below, the previous EquityTool, derived from the DHS 2010 survey, is applied to the 2010 data and the newer 2015 DHS survey data. In 2010, the proportion of households in each of the 5 quintiles is very close to 20%. The discrepancy seen is due to the use of a shorter questionnaire than used by the 2010 DHS survey originally.  However, by 2015, the distribution is skewed towards the wealthy. Fewer people are assigned to the fourth quintile and more are assigned to the fifth, the wealthiest, quintile.

We do not use the previous questions and weights, because over time, the population has become wealthier. Thus, comparing your respondents to this skewed distribution becomes challenging.

2. Keeping the same 13 questions and response options as the previous EquityTool, but calculating scores based upon the 2015 data.

As an alternative, one might wish to use the same questions as the previous tool, but update the weighting. This seems reasonable, as the relative contribution of each asset towards overall wealth may have changed over time. Using new weights, but the same variables as the previous tool, we can see how well the resulting quintiles compare to the quintiles based on the full wealth index created by ICF.

The table below presents the agreement between the quintiles created from the full wealth index in the 2015 dataset and the quintiles created by the previous EquityTool, the previous EquityTool variables with updated weighting, and the current EquityTool. As with the agreement statistics above, these figures are for the bottom 2 quintiles, middle quintile and top 2 quintiles.

The current EquityTool has the best agreement with the full wealth index quintiles with a kappa statistic of 0.82; however, the 2010 EquityTool questions combined with 2015 weights still manages to meet our minimum kappa statistic of 0.75. The previous 2010 EquityTool combined with 2010 weights falls short of this standard. The reason for this difference is because these 13 questions are no longer the best predictors of the overall wealth distribution.

3. Comparing the previous 13 questions and scores, and the new EquityTool (14 questions).

Although all of the questions in the previous EquityTool are found in the current EquityTool, we found that the previous questions were no longer accurately predict wealth. Because more people may now own the assets predictive of wealth in 2010, we need to alter questions to differentiate people and households more accurately.

The table below shows how the previous and current EquityTool compare, using the same population. This is analogous to a comparison of the two versions of the EquityTool on the population you surveyed using our previous EquityTool.

The rightmost column indicates that the current EquityTool divides the population into five relatively even groups. The bottom row shows that the older EquityTool does not divide the population as evenly into equal quintiles – it puts more people into the highest quintile. The cells within the table indicate how respondents are categorized, if measured using the two different tools. Of those who are categorized as quintile 1 using the current tool, 8% of them would have been considered in the poorest quintile in the previous tool (see the first row). Similarly, for those currently categorized as in the third quintile, 36.3% would have previously been categorized as being in the fourth quintile. If you had used the previous EquityTool, you can expect that with the current version, your respondents will look slightly more poor.  This is not incorrect, but rather reflects the reality that we are measuring them against a more accurate benchmark.

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 equitytool@m4mgmt.org and we will assist you.

[1] From povertydata.worldbank.org, reporting Poverty headcount ratio at $1.90/day at 2011 international prices.

[2] From the Colombia DHS 2010 dataset household recode, available at http://dhsprogram.com/