How reliable is the asset score in measuring socioeconomic status? Comparing asset ownership reported by male and female heads of households

Abstract

Asset scores are widely used as the preferred method of measuring socioeconomic wellbeing of households in developing countries. We examine the degree of discrepancies in reporting asset ownership by male and female heads of the same household. Household asset scores were estimated separately for male and female responses, using Principal Component Analysis, the method widely used in the literature, and households were categorized into wealth quintiles. The results indicate that only half of the households belonged to the same quintile groups for both male and female response-based asset scores. In addition, the two estimates of asset scores within the same quintile deviate by more than 20% for 71% of households in the top three quintiles and for 18% in the poorest two quintiles. Inter-individual (male/female) variability in reporting the asset ownership was high enough to raise concerns about the validity and reliability of asset scores as a metric of household socioeconomic status. Although the study did not try to ascertain underlying reasons for differential reporting, possible explanations could be a lack of awareness among household members on asset ownership or differential propensity to demonstrate relatively better social status of the household by male and female respondents. To improve reliability of asset scores, methodology for collecting asset ownership information should define who in the household may or may not be used as a respondent. Visual verification of reported ownership of assets will reduce male-female discrepancies but the verification process is time-consuming and intrusive, thus negating the advantages of collecting asset data. Alternatives to asset-based scoring need to be considered and one approach could be to solicit subjective opinions from male and female heads on the location of households in the social hierarchy.