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Home » Topics » Wealth Index » Constructing Wealth Incidence Curve (Confusion- Using Wealth Index to Construct Wealth Incidence Curve)
Constructing Wealth Incidence Curve [message #29351] Mon, 03 June 2024 15:21 Go to previous message
tednoel is currently offline  tednoel
Messages: 12
Registered: April 2024
Member
Hi all, just creating a post here to see if anyone might be able to assist. I am trying to create wealth index curves for Senegal using DHS data spanning from the years of 2015 to 2021 but there is something that I am either conceptually misunderstanding or not doing right with the code. I've pasted my code below for people to examine:

svyset [pweight=hv005], strata(hv023) psu(hv001)
gen wealth_quintile_2015 = hv270 if hv007 == 2015
gen wealth_quintile_2017 = hv270 if hv007 == 2017

* Calculate mean wealth for each quintile in 2015
svy: mean hv270, over(wealth_quintile_2015)

* Calculate mean wealth for each quintile in 2017
svy: mean hv270, over(wealth_quintile_2017)

* Merge the datasets
merge 1:1 wealth_quintile_2015 using wealth_quintile_2017, keep(match)

* Calculate growth rates between the two years
gen growth_rate = (wealth_quintile_2017 - wealth_quintile_2015) / wealth_quintile_2015

* Plot the Growth Incidence Curve
twoway (line growth_rate, sort title("Wealth Incidence Curve") xlabel(1(1)5) ylabel(, angle(0))))

As you can see I tried to incorporate population weights so that these wealth incidence curves could be representative at the household level... But nothing is working. When I am actually able to produce an incidence curve the curve is blank. I'm starting to think perhaps it's a problem with the variable itself? I didn't think there would be much issue using a wealth index because it would still capture levels of wealth which would be aggregated into the wealth incidence curve. Any advice here would be really appreciated. If wealth index is not suitable for creating a wealth incidence curve, is there a way to collapse the wealth index into a measurement of overall wealth? Thank you so much in advance!!!
 
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