Midiendo la desigualdad y el nivel de riqueza: una aplicación para Ecuador

Abstract

Currently, the metric of economic development has increasingly positioned the use of assets to represent household wealth. In this sense, the objective of this article is to construct an alternative index whose main characteristic is the use of assets owned by the household, thus complementing the traditional indicators based solely on income or expenditure. Therefore, it is about contributing to the academic debate about the validity of development indices to capture complex socioeconomic realities. In order to assess the robustness of the results, a Wealth Index is constructed for Ecuador, using two different surveys: the National Survey of Employment and Unemployment (ENEMDU), rounds 2011 and 2017 and the Survey of Income and Expenditure of the Urban and Rural Households 2011-2012 (ENIGHUR), using the Principal Component Analysis (PCA) Polychoric. Among the main findings, it is evident that the accumulation of assets has increased over time, especially in the poorest households, but at a different intensity in urban and rural areas. However, the inequality indicators regarding this indicator have not been affected; In addition, the possession of assets such as laptops, vehicles and coverage of basic services weigh more in the construction of the household wealth index. When comparing the level of wealth according to the polychoric methodology and the level of per capita income, it places households in a better position of well-being with the proposed methodology of the new indicator, especially in the poorest and richest quintile, although it is highlighted that significant levels of inequality remain, a structural problem in the socio-economic reality of Ecuadorian households.