Comparison of two approaches for measuring household wealth via an asset-based index in rural and peri-urban settings of Hunan province, China

We collected data on ownership of household durable assets, housing characteristics, and utility and sanitation variables in two village-wide surveys in Hunan province. We employed principal components analysis (PCA) and principal axis factoring (PAF) to generate household asset-based proxy wealth indices. Households were grouped into quartiles, from 'most wealthy' to 'most poor'. We compared the estimated household wealth for each approach. Asset-based proxy wealth indices were compared to those based on self-reported average annual income and savings at the household level.Spearman's rank correlation analysis revealed that PCA and PAF yielded similar results, indicating that either approach may be used for estimating household wealth. In both settings investigated, the two indices were significantly associated with self-reported average annual income and combined income and savings, but not with savings alone. However, low correlation coefficients between the proxy and direct measures of wealth indicated that they are not complementary. We found wide disparities in ownership of household durable assets, and utility and sanitation variables, within and between settings.PCA and PAF yielded almost identical results and generated robust proxy wealth indices and categories. Pooled data from the rural and peri-urban settings highlighted structural differences in wealth, most likely a result of localized urbanization and modernization. Further research is needed to improve measurements of wealth in low-income and transitional country contexts.Poverty and people's health status are intimately connected, yet the relationship between them is complex and bi-directional [1,2]. On one hand, ill-health may lead to economic poverty [1], or a decrease in expendable income due to high medical bills and/or via a direct reduction, or loss, of wages throughout an illness [3]. On the other hand, poor health may result from poverty [1], including an inability to afford adequate nutriti