Inequality Decomposition without Income or Expenditure Data: Using an Asset Index to Simulate Household Income

Commonly available survey data for developing countries often do not include income or expenditure data. This data limitation puts severe constraints on standard poverty and inequality analyses. We provide a simple approach to simulate household income based on publicly available Demographic and Health Surveys (DHS) and macroeconomic data. We illustrate our approach with DHS data for Bolivia, Burkina Faso, Indonesia and Zambia. We calculate standard inequality measures and decompose inequality by urban/rural, sex of the household head, household size and education of the household head.