20th February 2024 (9:00-11:00 am New York Time)
Registration link
Measuring Wealth in Household Surveys in Low- and Middle-Income Countries
A vulnerability perspective
Background and objectives
A wide variety of studies conducted in recent years have demonstrated the importance of reliable micro statistics on household wealth. Wealth is recognized as one of the three constituents of household economic well-being, together with consumption and income, to which it is strictly linked. On the one hand, wealth usually generates returns, thus supporting the current income and consumption. It can be used as collateral for accessing to credit market and providing owners the opportunity to buy a home or start a business, which is practically precluded to those who lack a sufficient amount of capital. Moreover, wealth provides the owners with power, influence, and prestige within the community they belong, especially when it is of considerable amount. Wealth may also play an important role in shaping the bargaining power among the members of the same household when it is unevenly distributed among them.
On the other hand, wealth is a reserve of resources for future consumption. From this point of view, its contribution to well-being is not limited to the actual transformation in consumption, as the wealth also assumes the role of a safety net, able to contrast, when needed, unexpected negative events: even a relatively small amount of wealth can be important for the poor and less poor, both in terms of vulnerability and resilience to economic shocks. The pandemic experience has largely demonstrated the beneficial role of wealth in preventing poverty, not only in Low- and Middle-Income Countries (LMICs).
A developed strand of literature has shown how information on household wealth significantly widens the study of poverty, complementing the traditional analyses based on the consumption indicator alone with those combining flows (consumption/income) and stock (wealth) indicators. Moreover, wealth data also allow us to focus on some dimensions of the economic discomfort of great importance, such as over-indebtedness and financial exclusion. Surveys on wealth are becoming increasingly important to study households’ financial stability and response to both economic policy and shocks.
While the number of High-Income Countries (HICs) conducting sample surveys on wealth has grown over the last decade (see for example the experience of the HFCS, the Household Finance and Consumption Survey, which has been conducted since 2011 by a group of European central banks and national statistical institutes), the practice of sample surveys on wealth is still limited among LMICs.
The lack of reliable and exhaustive information on household wealth in LMICs is a substantial limitation for effective policy design and economic analysis in these countries. Moreover, households who live in LMICs usually face greater uncertainties than those residing in HICs, both due to the usually lower extension of the welfare state in terms of education, health care, or pensions and to a greater impact of events like wars, internal conflicts, migration, and natural disasters, that the climate change is making more frequent and more severe. In such conditions, data on household wealth are even more important, and the motivation for promoting surveys on wealth is strengthened.
Against this background, at the end of 2022, the World Bank promoted a project aimed at the production of Guidelines for the collection of wealth data in household surveys conducted in LMICs, gathering suggestions and best practices from the vast available literature, and adapting them to the specific context of LMICs. The project is conducted by a working group that stably involves researchers and scholars from different institutions (WB, LWS, Bank of Italy, academia), and gains contributions from a wide net of international experts and scholars. It is expected to conclude its job by the end of 2025.
A draft of interim guidelines has been produced. It focuses on specific items that, while less important in HICs, assume great relevance in LMICs. Typical examples are livestock and land, which constitute most of the wealth held by rural households in many LMICs. Similarly, durable goods are relatively less relevant in HICs (and not included in the definition of wealth of the System of National Accounts, SNA) while being important for households living in LMICs. On the other hand, in LMICs it is lower but rapidly growing (and somewhat different) the diffusion of financial assets, and consequently different could be the ways this information is collected. Moreover, the Guidelines deal with the issue of property rights in informal contexts, defining ownership and trying to quantify the associated values.
Of great importance is also the development of reliable methods for the collection and analysis of wealth data at the individual level, which allows to shed light on the intra-household inequality and on the gender wealth gap. This line of research requires the collection of data both on the formal ownership of physical and financial assets among the members of the households, on the actual control over the resources held, and on the distribution of benefits tied to the assets.
The document produced so far contains guidelines for collecting wealth data in sample surveys conducted in LMICs. It includes a general framework of theoretical aspects, as well as the best practices for the collection of such data suggested by the literature, experts, and researchers.
The present event is mainly focused at:
1. Raising awareness of the importance of wealth data collection in LMICs.
2. Receiving comments on the standards proposed, that should be widely shared among experts and potential users.
3. Recruiting partners for testing and experiments that help in defining more precisely the most suitable questions and modalities to be used in data collection, for obtaining complete and reliable wealth data.
Description of the event
Date and time: 20th February, 2024; 9 – 10.30 am (New York time)
Audience: the event is directed to national statistical officers, central bank statisticians, statisticians and economists of international organizations and development banks, academics
Format and length of the event:
· Presentation of the draft guidelines: G. D’Alessio (World Bank), I. Toma (World Bank) (30 mins)
· Open issues: A. Neri (Bank of Italy) (20 mins)
· Discussion: t.b.d. (20 mins)
· Q&A from the public (20 mins)
Registration link:
Contact person: Giovanni D’Alessio, World Bank (gdalessio@worldbank.org)
Speakers’ bio
Giovanni D’Alessio is a Lead statistician at the Rome offices of the World Bank (C4D2), where he is coordinating a group of researchers for writing the Guidelines for Measuring Wealth in Household Surveys in Low- and Middle-Income Countries. For many years he was head of the Sample Survey Division of the Economics and Statistics Department of the Bank of Italy. He has extensively written on the topics of wealth, income, and inequality. He earned his PhD in Methodological Statistics from the University of Rome, La Sapienza.
Andrea Neri is a senior statistician at Banca d'Italia. He is currently the Head of Sample surveys Division. He is also member of several international Expert Groups relating the measurement of household wealth through sample surveys. His main research interests relate nonsampling errors, calibration, survey methods, wealth and income distribution.
Irene Toma is a development economist, and she works as a consultant for the World Bank, as well as other international organizations and research institutions, with experience both at field level and at HQ level. In recent years, she has worked on different projects focusing on wealth, gender, agriculture, food security and governance. She holds a bachelor's degree and a master's degree in development economics from the University of Florence.