# **3.5 Taking advantage of individual-level variables**

One key data constraint to global well-being measurement is that major surveys collect many outcomes at the household level rather than at the individual level. This implies that within-household inequalities are not observed even though well-being is typically not equally distributed within households. Importantly, this is a problem that affects not only inter-personal comparisons (Objective 1), but also cross-region comparisons (Objective 2) because the latter rely on the former.

Clearly, this is not a big issue for some dimensions that are almost equally distributed at household level, such as housing. However, key dimensions of well-being are typically unequally distributed within households. This is the case of the monetary dimension, as documented by a growing literature on intra-household decision making (Lise and Seitz, 2011).<sup>56</sup> Arguably, this is even more so the case for the health dimension, if only because health tends to decrease with age.

Yet, many household surveys contain some information on individual-level outcomes. This is typically the case for children’s schooling information or for the BMI information underlying stunting and underweight variables. The current practice in global multidimensional poverty measurement treats these individual level outcomes as-if they are household level outcomes.<sup>57</sup> For instance, under the World Bank’s MPM, a household is considered deprived in a schooling variable if one of its children is not enrolled in school (see Appendix 6.1). A natural alternative would be to switch the unit of analysis from the household level to the individual level. “Equal sharing” assumptions could generate individual level variables from the variables that are only available at household level, such as income of housing.<sup>58</sup> The advantage of such switch would be to allow accounting for the unequal individual outcomes observed in the data.

One disadvantage with such switch in unit of analysis is the risk of misinterpretation. Individual-level well-being indices obtained in this way may lead to improper interpersonal comparisons. To give a concrete example, DHS surveys provide information on underweight women but often do not provide information on underweight men. Taking advantage of this information on underweight women makes sense, but the resulting individual well-being indices cannot be compared across men and women.<sup>59</sup> However, they can certainly improve the inter-personal well-being comparisons across women. Impor-

> 56This literature relies on methods that are complex, even though some simplified methods have recently been proposed by Lechene et al. (2022) with limited additional data requirements. These methods are certainly worth further exploring.

> 57This need not be the case of children multidimensional poverty measures, where the unit of analysis is sometimes the individual child (Dirksen and Alkire, 2021; Alkire and Haq, 2023). 58Observe that such assumptions are already implicitly made when the unit of analysis is at household level. Indeed, a person living in a household identified as multidimensionally poor is herself considered to be multidimensionally poor.

> 59Observe that, similarly, interpersonal comparisons across men and women cannot be made using the World Bank’s MPM or the global MPI, at least not without the qualifier “living in multidimensionally poor household”.

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