Armenia 2000. - BVSDE

Further, many items that are candidates for inclusion in a DHS-based wealth index might be seenas directly influencing health status: water and sanitation for infant and child mortality, forexample. It would be desirable to include quintile-specific estimates for such items; but to theextent that such items have large index coefficients, any estimates for those items would besuspect. Such items appear to be relatively few and of limited statistical significance in the indexused here. However, for the sake of caution, quintile-specific estimates for items appearing in theindex have nonetheless been excluded from the basic tables and appear only in supporting tableIII.CWeighting of ItemsA further decision required in construction of an index concerns the weight to attach to each ofthe respective items. As noted earlier, the method used in this report is principal componentsanalysis (PCA).Adoption of this method was based on the findings, referred to earlier, that its use resulted inoutcomes that approximated reasonably well those produced by taking a consumption orexpenditure approach. Further, it often provides greater discrimination in economic status thandoes the use of consumption/expenditures. It has also emerged as the standard approach for usein analyses of the sort presented here, so that its adoption is largely non-controversial.Yet this choice, too, is not without an arbitrary aspect; for alternative plausible methods exist.Examples include the “inverse possession” approach, which gives more weight to itemspossessed by only a few and less to those possessed by many; 20 or, perhaps, the common practiceof simply assigning the same weight to each index item.Use of Principal Components Analysis with Dichotomous VariablesAn additional issue concerns the use of a technique like PCA, developed for use with continuousvariables, in the construction of an index based primarily on dichotomous variables. Whilelegitimate in principle, any reservations in this regard are of limited practical consequence, sincethe considerable experimentation undertaken in preparation for the tabulations presented hereindicated that any inaccuracy introduced by applying PCA to the analysis of the dichotomousvalues used is minimal.Economies of ScaleCalculating the values for a household wealth index also requires a decision concerningeconomies of scale that exist in the households covered. The calculations presented here assumecomplete economies of scale. The implicit assumption is that additional members do not add tohousehold expenses on items included in the index.E. DEFINITION OF QUINTILESQuintiles of IndividualsAs noted earlier, the quintile-specific figures presented in this report refer to quintiles ofindividuals in the household population. Such quintiles need to be distinguished from quintiles ofhouseholds or quintiles of only those people in the population who are “at risk”: that is, subjectto the particular condition, eligible for the particular service, or capable of behaving in aparticular way (children born alive for infant and under-five mortality, for example; or adult menand women for condom use or non-regular sexual partnerships).20 Saul S. Morris et al., “Validity of Rapid Estimates of Household Wealth and Income for Health Surveys in RuralAfrica,” Journal of Epidemiology and Community Health 54 (2000): 381-87.- 41 -