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Wealth Quintile calculation [message #4402] Wed, 20 May 2015 23:10 Go to previous message
thuda is currently offline  thuda
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Registered: May 2015
Location: Sydney
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Hi: I am trying to calculate the wealth quintile with BDHS 2007 and 2011 data, without including the amenities ( clean cook, toilet, electricity) as i would like to keep them as separate variable. However i don't understand the method that has been reported in the report. Is it possible to share the related stata or any other statistical software code and also briefly describe the method in more details ( or is there any published reference that has used the same method).

i dont understand the following part

In the first step, a subset of indicators common to urban and rural areas is used to create wealth scores for households in both areas. Categorical variables are transformed into separate dichotomous (0-1) indicators. These indicators and those that are continuous are then examined using a principal components analysis to produce a common factor score for each household - WHICH VARIABLE HAVE BEEN TAKEN.

In the second step, separate factor scores are produced for households in urban and rural areas using area-specific indicators. DIDNT UNDERSTAND

The third step combines the separate area-specific factor scores to produce a nationally-applicable combined wealth index by adjusting area-specific scores through a regression on the common factor scores. DIDNT UNDERSTAND
 
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