A Measure of Household Infrastructure Based on Factor Analysis of Census Data with an Application to Bolivia - I: Development

Abstract

Abstract In the context of analysis of Millennium Goals and Human Development in Bolivia a synthetic measure of household infrastructure was developed. The measure was constructed applying factor analysis to a large number of census indicators concerning shelter, living space, water supply, energy and sanitation. This technique allows a score to be applied to each household (and indirectly to each person), and may serve also to characterise small areas, groups or populations, such as municipalities, communities or neighbourhoods. The household infrastructure measure (HIM) is a composite average of factor scores derived by Principal Component Analysis from observed variables, most of which are dummies related to census categorical questions. No factors are excluded, on the ground that all variance in the observed variables is relevant to the standard of living, even if not closely related to variation in other observed variables. The HIM is computed for Bolivia, based on the 2001 Population Census, and results shown for major geographical areas and socioeconomic groups. Separate papers will be devoted to validation of the measure and to analyse its behaviour over time. JEL codes: C43, C81, I31, I32