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      Estimating wealth effects without expenditure data—or tears: An application to educational enrollments in states of India

      1 , 2
      Demography
      Project Muse

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          Abstract

          Using data from India, we estimate the relationship between household wealth and children’s school enrollment. We proxy wealth by constructing a linear index from asset ownership indicators, using principal-components analysis to derive weights. In Indian data this index is robust to the assets included, and produces internally coherent results. State-level results correspond well to independent data on per capita output and poverty. To validate the method and to show that the asset index predicts enrollments as accurately as expenditures, or more so, we use data sets from Indonesia, Pakistan, and Nepal that contain information on both expenditures and assets. The results show large, variable wealth gaps in children’s enrollment across Indian states. On average a “rich” child is 31 percentage points more likely to be enrolled than a “poor” child, but this gap varies from only 4.6 percentage points in Kerala to 38.2 in Uttar Pradesh and 42.6 in Bihar.

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          Most cited references25

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          Economics and consumer behavior

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            Measuring living standards with proxy variables.

            Very few demographic surveys in developing countries have gathered information on household incomes or consumption expenditures. Researchers interested in living standards therefore have had little alternative but to rely on simple proxy indicators. The properties of these proxies have not been analyzed systematically. We ask what hypotheses can be tested using proxies, and compare these indicators with consumption expenditures per adult, our preferred measure of living standards. We find that the proxies employed in much demographic research are very weak predictors of consumption per adult. Nevertheless, hypothesis tests based on proxies are likely to be powerful enough to warrant consideration.
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              The Effect of Household Wealth on Educational Attainment: Evidence from 35 Countries

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                Author and article information

                Journal
                Demography
                Project Muse
                0070-3370
                1533-7790
                February 01 2001
                February 01 2001
                : 38
                : 1
                : 115-132
                Affiliations
                [1 ]Development Research Group, The World Bank, 1818 H Street NW, Washington, DC 20433
                [2 ]John F. Kennedy School of Government and The World Bank
                Article
                10.1353/dem.2001.0003
                11227840
                df2a4390-5ac7-4876-b66f-0f5639e0bdff
                © 2001
                History

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