The International Wealth Index (IWI)
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This paper presents the International Wealth Index (IWI), the first comparable asset based index of household’s material well-being, or economic status, that can be used for all low and middle income countries. IWI is similar to the widely used wealth indices included in the Demographic and Health Surveys and UNICEF MICS surveys, but adds the property of comparability across place and time. IWI is based on data from 2.1 million households in 97 developing countries. With IWI we provide a stable and understandable yardstick for evaluating and comparing the situation of households, social groups and societies among all regions of the developing world. A household’s ranking on IWI indicates to what extent the household possesses a basic set of assets, valued highly by people across the globe. IWI is tested thoroughly and turns out to be a stable index that hardly depends on the inclusion of specific items or on data for specific regions or time periods. National IWI values are highly correlated with human development, life expectancy, and national income, and IWI-based poverty measures with poverty headcount ratios.
KeywordsComparable wealth index Assets Developing world Material well-being Welfare measurement Poverty measurement
We are grateful to the DHS Program, the UNICEF MICS department, the Pan Arabic Project for Family Health (PAPFAM), the Integrated Public Use Microdata Series (IPUMS) department of the Minnesota Population Center, the National Statistical Offices of Brazil, Chile, Costa Rica, Sudan, Uruguay and Venezuela, the Statistical Information and Monitoring Programme on Child Labour (SIMPOC) of ILO-IPEC, and the Carolina Population Center at the University of North Carolina at Chapel Hill for making the datasets available that have been used in this project.
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