Welfare metrics for gender asset gaps
Description
It is now well established that women’s welfare outcomes are influenced by their ownership and control of household assets. In recent years, household asset surveys that capture individual ownership patterns—rather than treating the household as a unitary entity—have gained prominence. One key objective of these surveys is to measure gender asset gaps (GAP), defined as gender-based differences in the ownership of household assets. Existing GAP measures are largely positive in nature. While these metrics—whether incidence-based or ad valorem—quantify gender disparities in asset ownership, they do not directly capture the welfare consequences of women’s lack of ownership or control. However, there is substantial evidence that gender differences in asset ownership affect women’s life outcomes by influencing their bargaining power within the household. In this paper, we develop a general theoretical framework that enables the construction of a class of GAP metrics for directly measuring welfare losses arising from inequality in intra-household asset distribution. This framework allows welfare to be assessed at both the household and aggregate societal levels. Our approach is agnostic with respect to specific assumptions about inequality and its welfare implications. It only requires the existence of a real-valued household social welfare function, W(⋅)W(\cdot)W(⋅), defined over the household asset matrix YiY_iYi. This matrix records, for each household i∈{1,…,n}i \in \{1, …, n\}i∈{1,…,n}, the self-reported value of mmm different assets owned by kkk household members. For jointly owned assets, values are allocated based on ownership shares where available, or equally divided when such shares are unknown. To derive a welfare metric for gender asset gaps, we employ the Atkinson framework by defining an equally distributed equivalent asset distribution (EDEAD). Using a constant elasticity of substitution (CES) specification for W(⋅)W(\cdot)W(⋅), we parameterize inequality aversion. For a given level of inequality aversion, the welfare measure of the gender asset gap is defined as the ratio of EDEAD to total household asset value. This metric, GA∈(0,1]GA \in (0,1]GA∈(0,1], represents the proportion of observed household wealth required to achieve the same welfare level under equal distribution. While the Atkinson framework provides a tractable welfare metric, it also entails certain limitations, particularly regarding the choice of the social welfare function. This choice may range from a utilitarian formulation (with no inequality aversion) to a Rawlsian specification, depending on the CES parameter. To address this, we develop a normative framework for specifying inequality aversion in an intra-household context, drawing on insights from the capability approach. For policy applications, we argue that the Foster function offers a particularly useful specification. Let TiT_iTi denote the Theil index (mean log deviation) for household iii, computed over the asset distribution. We define a gender asset gap metric, GiF=e−TiG_i^F = e^{-T_i}GiF=e−Ti, as the ratio of observed household welfare (based on the Foster function) to potential welfare under perfect equality. This formulation can be extended naturally from the household level to broader aggregate measures. Although our primary focus is on settings where asset values are observable, we also discuss how welfare metrics can be constructed when only ownership incidence data are available, using asset indices. Finally, we provide an empirical illustration of the proposed framework using individual-level asset data representative of the state of Karnataka, India.
Copyright Date
January 2014
Publication Date
1-1-2014
Keywords
Gender asset gaps, Atkinson measure, Asset matrix
Conference
International Association for Feminist Economics, 20th June, 2014, Ghana
