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Soc Indic Res (2015) 122:6585
DOI 10.1007/s11205-014-0683-x
Jeroen Smits Roel Steendijk
Accepted: 19 June 2014 / Published online: 12 July 2014 Springer Science+Business Media Dordrecht 2014
Abstract This paper presents the International Wealth Index (IWI), the rst comparable asset based index of households material well-being, or economic status, that can be used for all low and middle income countries. IWI is similar to the widely used wealth indices included in the Demographic and Health Surveys and UNICEF MICS surveys, but adds the property of comparability across place and time. IWI is based on data from 2.1 million households in 97 developing countries. With IWI we provide a stable and understandable yardstick for evaluating and comparing the situation of households, social groups and societies among all regions of the developing world. A households ranking on IWI indicates to what extent the household possesses a basic set of assets, valued highly by people across the globe. IWI is tested thoroughly and turns out to be a stable index that hardly depends on the inclusion of specic items or on data for specic regions or time periods. National IWI values are highly correlated with human development, life expectancy, and national income, and IWI-based poverty measures with poverty headcount ratios.
Keywords Comparable wealth index Assets Developing world Material well-being
Welfare measurement Poverty measurement
1 Introduction
Since the late 1990s, wealth indices have become widely used instruments for measuring socio-economic status of households in low and middle income countries. Hundreds of research papers have appeared in which wealth indices were used for studying variation in health, mortality, poverty, education, work and other outcomes in almost all countries of
Electronic supplementary material The online version of this article (doi:http://dx.doi.org/10.1007/s11205-014-0683-x
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J. Smits (&) R. Steendijk
Global Data Lab, Department of Economics, Institute for Management Research, Radboud University Nijmegen, PO Box 9108, 6500 HK Nijmegen, The Netherlandse-mail: [email protected]
The International Wealth Index (IWI)
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the developing world (e.g. Gwatkin et al. 2007; Howe et al. 2008; Filmer and Scott 2012; Falkingham and Namazi 2002).
Wealth indices are considered effective indicators of long-term socio-economic position, living standard or material well-being of households (Filmer and Pritchett 1999,...