Local Distributions of Wealth to Describe Health Inequalities in India: A New Approach for Analyzing Nationally Representative Household Survey Data, 1992–2008

BACKGROUND Worse health outcomes including higher morbidity and mortality are most often observed among the poorest fractions of a population. In this paper we present and validate national, regional and state-level distributions of national wealth index scores, for urban and rural populations, derived from household asset data collected in six survey rounds in India between 1992-3 and 2007-8. These new indices and their sub-national distributions allow for comparative analyses of a standardized measure of wealth across time and at various levels of population aggregation in India. METHODS Indices were derived through principal components analysis (PCA) performed using standardized variables from a correlation matrix to minimize differences in variance. Valid and simple indices were constructed with the minimum number of assets needed to produce scores with enough variability to allow definition of unique decile cut-off points in each urban and rural area of all states. RESULTS For all indices, the first PCA components explained between 36% and 43% of the variance in household assets. Using sub-national distributions of national wealth index scores, mean height-for-age z-scores increased from the poorest to the richest wealth quintiles for all surveys, and stunting prevalence was higher among the poorest and lower among the wealthiest. Urban and rural decile cut-off values for India, for the six regions and for the 24 major states revealed large variability in wealth by geographical area and level, and rural wealth score gaps exceeded those observed in urban areas. CONCLUSIONS The large variability in sub-national distributions of national wealth index scores indicates the importance of accounting for such variation when constructing wealth indices and deriving score distribution cut-off points. Such an approach allows for proper within-sample economic classification, resulting in scores that are valid indicators of wealth and correlate well with health outcomes, and enables wealth-related analyses at whichever geographical area and level may be most informative for policy-making processes.