Estimating wealth effects without expenditure data

Course ID
Ethiopian Economics Association (EEA)
Marlieen Dekker

In economic studies household economic status is usually proxied by measures of consumption or income. In recent years, several studies have advanced an asset-based index as an alternative measure of wealth status. Compared to measures based on consumption, the data required to construct such indices are less demanding and the measure is simpler to calculate. In most studies the asset-based wealth index is constructed with a standard list of assets comprising household ownership of consumer durables, the characteristics of the household’s dwelling and sometimes household landownership. These indices have been used to estimate the effect of long term economic status on socio-economic outcomes such as health status or children’s school enrolment.

This paper extends the use of an asset-based wealth index in estimating the effect of long term wealth status on food security, measured as the number of weeks in a typical year in which the household has substantially less to eat than otherwise. The paper also addresses the question: what assets should be included in the wealth index to best reflect long term economic status in rural Ethiopia? We use data from the Ethiopian Rural Household Survey (ERHS) collected in 1994 and 1995 to construct several asset-based wealth indices and test the predictive power of these indices in explaining differences in food security. We also explore regional differences in the relationship between asset-based wealth and food security. The outcomes of this analysis will be used to design a data collection record for a study on social networks and risk sharing behaviour within and between households, in which long term economic wealth features as a control variable.

Corporate Author: Getnet Alemu & []. & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: Ethiopian Economic Association (EEA)
Primary Descriptors: Wealth Status

Secondary Descriptor: Wealth Index

Geographic Descriptors: Ethiopia
Cataloge Date: 02/27/2013
Broad Subject heading: Growth and Development – wealth
Call Number: 330.963 PRO 2006
Serial Key Title: Proceedings of the Third International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: I
Publication date: 2013-05-27 23:06:00
Forum or Discussion date: 2013-02-27 15:02:02
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Marleen Dekker

Upcoming Events


Call For Paper 18 International Conference

8:00 am - 8:00 amEEA Head Office

Ethiopian Journal of Economics

8:00 am - 5:00 pmEEA Head Office

Ethiopia’s Homegrown Economic Reform Agenda

8:00 am - 5:00 pmIntercontinental Hotel

Tenth Annual Conference

8:00 am - 5:00 pmHomeland hotel conference hall