HOUSEHOLD ECONOMICS WELL-BEING INDEX IN THE MAP TA PHUT, RAYONG

Abstract

This paper deviates from using traditional economic indicators – income and expenditure – to assess household’s living standard. The objective of this research is to survey the pattern of asset holding in the Map Ta Phut area and apply multivariate analysis techniques to construct the household asset indices.

Two statistical techniques, namely Principal Component Analysis (PCA) and Multiple Correspondence Analysis (MCA), are applied in this paper. Theoretically, MCA is an extension of PCA which allows one to analyze the pattern of relationships of several categorical dependent variables.

The study considers 4 dimensions of household’s living standard; environment and infrastructure, durable asset, asset for investment, and human capital asset. The PCA and MCA techniques are applied to the asset holding data, by using the stratified sampling, the data collection yields 253 households.

The result shows that, except from human capital asset, the PCA technique performs better than MCA in term of the correlation with household’s income data. Moreover, the result suggests that the household asset index could be used as either an alternative or a complementary measure to classify household socio-economic position, especially in the area where income and expenditure data are unavailable.