Amadou,
You are not getting evenly distributed wealth quintiles because you
are not including enough assets in your PCA. I assume that you are
working with DHS data (Demographic and Health Survey,
www.measuredhs.com). Most DHS surveys contain data on a household's
water source and the building material. Try to include this
information in your PCA. The criticism of your colleague is valid but
other researchers have demonstrated that the wealth index is a good
indicator of household wealth in the absence of data on household
income or expenditures. Here are two references:
Filmer, Deon, and Lant H. Pritchett. 2001. Estimating wealth effects
without expenditure data - or Tears: An application to educational
enrollments in states of India. Demography 38 (1), February: 115-132.
Rutstein, Shea Oscar, and Kiersten Johnson. 2004. DHS comparative
reports no. 6: The DHS wealth index. Calverton, MD: ORC Macro.
Hope this helps,
Friedrich Huebler
--- [email protected] wrote:
> Thanks to Nick and Mark for their inputs.
>
> Mark, the polychoric and polychoricpca are running forever.
> Is there a better way to do this?
>
> Nick,
> Unfortunatelly, he left for the weekend.
>
> But basically, in his reasonning, the PCA is reserved for
> continuous
> variables while the MCA is reserved for dummy variables. In the
> same
> idea, categorical variables (more than two responses) are to be
> used with PCA.
>
> He is a statistician, I am not. I know very few of factor analysis.
> My little
> understanding is that it creates a common factor from a dispersion
> in varlist.
>
> My problem is that I want to create an asset index.
>
> factor radio tv frige bike moto car , pcf factor(5)
> score wealthindex
>
> xtile wealthgroup5 = wealthindex, nq(5)
>
> The score I obtain after the factor is of poor quality since I do
> not have a homogenous
> distribution (i.e. approx 20%) of wealthgroup5 subgroups. I have
> the same problem with or without weights.
>
> Any clue what is the best solution?
>
> Many thanks.
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