Abstract
BackgroundAsset-based indices are widely-used proxy measures of wealth in low and middle-income countries (LMIC). The stability of these indices within households over time is not known.MethodsWe develop a harmonized household asset index using Principal Component Analysis for the participants (n = 2392) of INCAP Longitudinal Study, Guatemala using data from six waves of follow-up over the period of 1965–2018. We estimate its cross-sectional association with parental schooling (in 1967–75) and attained schooling (in 2015–18) of cohort members. We study how patterns of cross-sectional loadings change over time and between urban-rural settings. We assess its robustness to omission of assets or study waves and alternate specifications of factor extraction procedure (exploratory factor analysis, multiple correspondence analysis).ResultsThe harmonized index constructed using 8 assets and 11 housing characteristics explained 32.4% of the variance. Most households increased in absolute wealth over time with median wealth (25th percentile, 75th percentile; households) increasing from − 3.74 (− 4.42, − 3.07; 547) in 1967 to 2.08 (1.41, 2.67; 1145) in 2017–18. Ownership of television, electricity, quality of flooring and sanitary installation explained the largest proportion of variance. The index is positively associated with measures of schooling (maternal: r = 0.16; paternal: r = 0.10; attained: r = 0.35, all p < 0.001). In 2015–18, house ownership versus housing characteristics and ownership of electronic goods differentiate households in urban and rural areas respectively. The index is robust for omission of assets or study waves, indicator categorization and factor extraction method.ConclusionA temporally harmonized asset index constructed from consistently administered surveys in a cohort setting over time may allow study of associations of life-course social mobility with human capital outcomes in LMIC contexts. The approach permits exploration of trends in household wealth of the sample over a follow-up period against repeated cross-sectional surveys which permit the estimation of only the mean trajectory.
Highlights
Asset-based indices are widely-used proxy measures of wealth in low and middle-income countries (LMIC)
We report the Spearman rank correlations of the harmonized index with alternative indices to assess the sensitivity to dropping assets and study waves (S3), the structure (S4) of the correlation matrix (Pearson, polychoric) and the factor extraction method (PCA, Exploratory factor analysis, Multiple Correspondence Analysis (MCA)), categorization of housing characteristics into ordinal (S5; low, medium, high)
For cohort members followed over a period of 50 years, an asset index created by pooling study waves shows an increase in absolute wealth over time
Summary
Asset-based indices are widely-used proxy measures of wealth in low and middle-income countries (LMIC) The stability of these indices within households over time is not known. Asset indices are widely used proxy measures of individual and household wealth in studies and surveys conducted in low and middle-income countries (LMIC) due in part to their ease of collection and estimation [1,2,3]. Such indices are proxy measures of ‘long-run’ income, poverty and wealth, and are closely associated with nonfood expenditures [4, 5]. The comparability of asset indices over time and between contexts is an active area of research in social sciences in the last decade [1, 3, 11,12,13]
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