ABincome

Working Papers
Vanneman, Reeve, Cecily Adams, and Amaresh Dubey. 2007. “Income, Consumption, and Assets in India. ” Presented at the Annual Meetings of the Population Association of America. New York, N.Y.

ABSTRACT
Using original data from a newly collected nationwide survey of 41,554 households in India, we examine the use of income, expenditure, and asset measures of economic standing. While expenditure and asset measures are often included in developing country surveys, this survey is unusual in including estimates of household income as well. We describe the construction of these three measures and analyze their distributions across households and 22 Indian states. Approximately 57% of all household income comes from wages and salaries, 16% from non-farm business income, and 22% from farms. Across households, income is moderately correlated with expenditures (r=.50) and assets (r=.59), while expenditures and assets are slightly more correlated (r=.63). Each of the three main components of income (wages and salaries, self-employed businesses, farms) have similar correlations with expenditures and assets among households with primarily wage, business, or farm income, suggesting that each component is measured with similar validity. Associations with other household indicators vary however. Income is slightly more responsive to adult education (β=.096) than are expenditures (β=.080). Total expenditures, however, have a stronger association with medical expenses for short-term morbidity (r=.26) than does income (r=.07) or assets (r=.08). Assets have a stronger relationship with children’s school enrollments (r=.49) than do expenditures (r=.34) or income (r=.25).