Staveteig, Sarah and Lindsay Mallick. 2014. Intertemporal Comparisons of Wealth with DHS Data: A Harmonized Asset Index Approach. DHS Methodological Reports No. 15. Rockville, Maryland, USA: ICF International.
Over the past 30 years, the Demographic and Health Surveys (DHS) Program has conducted more than 300 household surveys in over 90 countries. As the number of countries with multiple surveys has risen, there is an increased opportunity for comparisons of health in relation to economic status over time. However, the DHS Wealth Index, which ranks relative economic standing among surveyed households, is computed separately for each survey. Existing approaches to make the DHS Wealth Index comparable across surveys appear to encounter problems when comparing early DHS surveys to later DHS surveys; the latter frequently contain triple the number of questions related to wealth than earlier surveys. This study focuses on the particular challenge of conducting intertemporal analysis using DHS data from the mid-1990s to the present. It demonstrates how to generate a Harmonized Wealth Index (HWI) based on common assets and services across surveys. In eight focal countries—Bangladesh, Bolivia, Cameroon, Egypt, Ghana, Indonesia, Nepal, and Zimbabwe—we use pooled household data to compute an HWI. Results show that the HWI is highly correlated with the existing DHS Wealth Index. Loss of information due to asset harmonization compresses the index, but this occurs primarily toward the top of the distribution in the most recent survey; except for Bolivia in 1998 and Ghana in 2008, the HWI appears to perform well at differentiating gradations of poverty. Overall, the HWI approach is a promising avenue for analysts and policymakers interested in intertemporal comparisons of health and poverty in specific countries.