Interpretation

Interpretation

INTERPRETATION

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ASSET TO INCOME ESTIMATOR

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ome useful things to keep in mind when looking at the results:

A quintile is 20% of the population. If a population has 1,000,000 people in it, you could divide it into five quintiles of 200,000 each. If someone is in the bottom wealth quintile (quintile 1), they are among the poorest people in the country. If they are in the highest quintile (quintile 5), they are among the wealthiest in the population. The quintiles provide a picture of relative wealth – whether someone is richer or poorer compared to others in the population.

The dollar value for each quintile represents the median value. The median value is used instead of the mean (average) value since quintiles have skewed income distributions. Therefore, the median income presented is the income calculated for the 10th, 30th, 50th, 70th and 90th percentile of the population. The results also present the range of incomes in each quintile, or the income of someone in the bottom up to the income of someone in the top of the quintile.

The A2IE allows you to view individual or household income, per day, month, or per year for each quintile. In the single country chart to the right, we see that for Tanzania, the median annual income for an individual in the poorest 20% (Quintile 1) of the national population is $287; those in the richest 20% of the national population have a median annual income of $1979.

The minimum and maximum income values for each quintile are useful to show variation in income within a quintile. When the range between the minimum and maximum income in a quintile is narrow, we know that most people in that quintile are similar in terms of income. However, if the income range is wide, we can interpret that to mean that the quintile includes a wide range of individuals or households which have very different incomes. Looking at the above graph, we can see that [the annual income of most individuals in quintiles 1-4 falls within a small range, while the annual income of the richest individuals in Tanzania can range quite bit.

The A2IE is also a useful tool for identifying differences in income which would not be apparent by looking at wealth quintiles alone. In the multi-country comparison chart to the left, we see that for Mozambique, the median estimated monthly household income is lower for every quintile when compared to households in the same quintile living in Tanzania.

The differences in median estimated household monthly income increase from the Q1 to Q4, and then the gap narrows for the richest. For example, if an intervention targeted to the poor required some sort of payment, opportunity for success in the two countries may look different. Understanding both relative and absolute wealth, then, are important.

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