Abstract
The use of the asset index in poverty targeting is a modern technique. We used the principal component analysis (PCA) technique in order to create the asset index. Then the asset index was used to assess the socio-economic status (SES) of households. The reliability of the index was tested firstly by ascertaining whether the index was internally coherent, secondly the robustness was tested using the sub-indices such as housing infrastructure and ownership. The methodology is applied and demonstrated using the household survey data in Rwanda. The Rwanda data analysis showed that the age of household head, education level of the household head, gender of the household head, place of residence, the province of household head and size of the household (number of household members) were the significant predictors of poverty of the household in Rwanda
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