Constructing a Multidimensional Socioeconomic Index and the Validation of It with Early Child Developmental Outcomes

Abstract

The chapter focuses on the development of a socioeconomic index (SEI) using a Principal Components Analysis (PCA) of 26 variables at the Dissemination Area (DA) level for Alberta. First, the importance of socioeconomic factors in understanding child development outcomes is discussed, addressing the micro-macro level influences. Second, a description of the framework is provided along with the statistical procedures. Third, the results are presented, followed by a discussion of the benefits of having a summary measure in understanding kindergartners' developmental outcomes. The five components of SEI explained 56 per cent of the total variation in the overall index. The SEI patterns across Alberta were examined and the index was validated for its associations to the five domains of early child developmental outcomes, physical, social, emotional, language and cognitive skills, and communication and general knowledge. The index emerged as a strong correlate of all five domains with the strength of relationships varying across developmental domains and geography. A major strength of the procedure presented in the study is that it can be applied to different levels of geography and provides meaningful information to developmental research.