Housing Index

Other Tools The Housing Index Participatory Wealth Ranking The Means Test Geographic Targeting

General Description:

This is an example of a house of a very poor family.

The Housing Index uses the structure of the house and sometimes the compound to differentiate between economic levels of households and identify those who are poor. Since housing is generally the most important asset of households and since people generally invest a great deal in their houses, the building itself represents an extremely visible reflection of household wealth. The size of the house and compound, the material used for building the house, the number of rooms, the presence of running water and bathroom facilities, all taken together provide very strong impressionistic evidence of household economic levels. The housing index, variations of which are used by several MFIs, but which has been standardized best by CASHPOR, uses these features to determine who is poor and who is better off.

How Does Targeting Work:

Field staff walk systematically through villages or sections of villages. They look at each house, eliminating those that are obviously expensive and well built. The others are scored according to size, construction materials for walls, floor and roof, and sometimes other variables such as water supply, toilets, access to electricity, etc. Scores for each indicator are then added to create a composite score. Cutoff scores are established to include households considered poor and exclude those that are well off.

Constructing the Housing Index:

CASHPOR has been a pioneer in developing the Housing Index. It created a composite index known as the CASHPOR House Index using the size of the house, its structural condition, the quality of walls, and the quality of the roof. It scores houses based on:

This is an example of a house of a poor family.

1. Size

Small: 0 Medium: 2 Big: 6

2. Structural condition

Dilapidated: 0 Average: 2 Good 6

3. Quality of walls

Poor: 0 Average: 2 Good: 6

4. Quality of roof

Thatch/Leaves: 0 Tin/Iron sheets: 2 Permanent roof: 6

A cut-off score of total points is established to separate the houses of the poor from those of the non-poor. The index is context specific and CASHPOR has refined its index for adaptation to different regions.

 

The characteristics MFIs consider to create their housing indices can be quite minimum to being relatively extensive.TSPI in Philippines has a fairly simple housing index. It scores houses based on:

1. Size (Big: 4, Medium: 2, Small: 0)

2. Structure (Firm: 4, Moderate: 2, Bad: 0), and

3. Roof (Tiles: 2, New: 1, Old: 0.5 and Nipa: 0).

 

SHARE in India, on the other hand, brings into account quite extensive housing characteristics in computing the housing index. It scores houses based on:

This is an example of a house of a non-poor family.

1. Size (Big: 4, Medium: 2, Small 0)

2. Structure (Firm: 4, Medium: 2, Bad: 0)

3. Roof material (RCC: 4, Tiles: 3, Asbestos: 2, Zinc:1, Bamboo: 0, Thatched: 0, Wood+ Stone + Mud: 1)

4. Wall material (Brick: 4, Stone: 1, Zinc: 1, Mud: 0.5, Bamboo: 0)

5. Electric supply (Yes: 2, Shared: 1, No: 0)

6. Water supply (Own well: 1, Community well: 0)

7. House Ownership: (Own: 3, Inherited: 2, Rented: 1, Shared: 0)

8. Toilet (Pit: 2, Flush: 1, Open area: 0)

9. Cooking (Gas: 3, Oil: 2, Charcoal: 1, Wood: 0, Smokeless Chulhas: 0)

10. Radio/Tape Recorder (New: 2, Old: 1, None: 0)

11. Vehicle (New moped: 4, Old Moped: 2, New bicycle: 1, Old bicycle: 0.5, None: 0)

12. Government Ration Card (Yes: 3, Yellow: 2, White: 1, No: 0)

13. Fan (Yes: 1, No: 0).

A cut-off score of total points is established to separate the houses of the poor from those of the non-poor. In the case of TSPI an individual with a score below 4.5 is eligible for a loan (although adjustments to that cutoff point are made based on the locality). Individuals with scores of more than 20 are considered ineligible for SHARE loans, while those with scores below 20 are interviewed further to assess their eligibility.

 

Related literature:

Cost-effective targeting: two tools to identify the poor ()
Gibbons, D.S.; Simanowitz, A.; Nkuna, B. / Sembilan, Malaysia and Tzaneen, South Africa: CASHPOR / SEF 1999

 

Overcoming the obstacles of identifying the poorest families: using participatory wealth ranking (PWR), the CASHPOR House Index (CHI), and other measurements to identify and encourage the participation of the poorest families, especially the women of those families ()
Simanowitz, A.; Nkuna, B.; Kasim, S.; Gailey, Robert / Microcredit Summit 2000

 

 

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