Assessing changes in wealth index using primary survey data

Abstract

In this study, we have introduced a new method to develop the Wealth Index (WI). In this regard, primary survey data, along with secondary data obtained from the National Family Health Survey-4 (NFHS-4) and NFHS-5 datasets, is used to construct the WI for the Koraput district in the Indian state of Odisha. Furthermore, we compared the WI obtained from the primary data with the WI obtained from the NFHS-4 and NFHS-5 data sets for Koraput and Odisha. Furthermore, to analyze wealth disparities at a finer scale, we computed and compared sub-indices in a similar manner to the WI. To develop the WI, we adopted a novel approach based on principal component analysis (PCA) with orthogonal rotation of factors whose eigenvalue is greater than 1 to utilize the maximum variance of data. The results derived from the WI and its sub-indices indicate that, when contrasted with Odisha as a whole, Koraput exhibits a lower level of wealth. The findings also reveal that, over time, there has been some improvement in wealth conditions, but they remain a cause for serious concern. Overall, the WI for the said district presents critical results, underscoring the urgent need for government or NGO intervention.