Discussions of wealth inequality are a welcome departure from the exclusive focus on poverty using calculations based on consumption surveys.

Wealth is crucial for consumption smoothing and acts as a buffer to draw upon during times of distress. In many ways, wealth is more aligned with the concept of wellbeing than income or consumption. Wealth is also recognised for its role in creating opportunities for future generations. Typically, one considers the Gini coefficient or the wealth shares of the top deciles in trying to understand the extent of inequality.

Based on the All India Debt and Investment Survey (2002-03), Jayadev, Motiram, and Vakulabharanam report a Gini of 0.65 for per capita assets and 0.66 for per capita net worth. Using more recent data, the Credit Suisse’s Global Wealth Report finds that for India, the richest 10 per cent account for almost three-fourths (74 per cent) of total wealth.

The limitations Ironically, even as there is a broad theoretical consensus that wellbeing is vested in individuals, data is usually collected at the household level. Thus, in order to arrive at individual measures, a per capita approach is adopted wherein the total household wealth is divided equally among its members. This approach suffers from two key limitations.

First, the per capita method underestimates inequality by treating the household as a unified structure where all members are equal with respect to asset holdings. This is, at best, a questionable assumption.

For example, individual level asset ownership data from the Karnataka Household Asset Survey (KHAS, 2010-11), shows that for rural Karnataka, the Gini for wealth (based on gross physical worth) using the per capita approach is 0.66 but substantially higher at 0.90 using individual level wealth information.

A second limitation is that household level data collection does not allow for any analysis of wealth inequality within the household. KHAS data shows that such intra-household inequality is pervasive and significant; a third of all wealth inequality between married men and women in Karnataka comes from inequality within households (specifically distribution of wealth between husband and wife).

Women’s wealth share being low is an important consideration for gender equity as well as for its impact on individual, household and community wellbeing.

Research on intra-household resource allocation provides evidence that assets in the hands of women enhance their own welfare (reduced experience of intimate partner violence), with further implications for intergenerational and broader social outcomes (improved human capital for children). While it is true that some assets like a house are public goods that are accessed and enjoyed by non-owners as well, ownership enables economic empowerment that affects other dimensions of a person’s life.

Women, for example, may be reluctant to walk out of abusive relationships because they have very few assets to call their own.

What lies beneath Surveys typically ask if the household owns land or the place of residence. The additional step of obtaining information on which household member owns the asset is rarely taken. There are several impediments to the collection of such information. Household wealth surveys are typically long, and inserting additional questions come with costs, coupled with the fear of undermining data quality by increasing refusal rate and non-sampling errors. To address these issues, one can draw lessons from several data collection experiments both in India and other developing countries.

The Gender Asset Gap Project (GAGP) collected individual-level asset data from Ecuador, Ghana, and India (Karnataka) in 2010-11. In these surveys, up to two respondents in each household were interviewed. The GAGP project identified a core set of questions that could be included in routine household surveys to calculate individual level asset ownership.

Another major effort is being undertaken by the UN Statistical Division (UNSD). The UNSD is working with nine countries under the Evidence and Data for the Gender Equality (EDGE) programme to pilot the collection of individual-level asset data.

The more serious impediment, however, is the assumption by a majority of scholars and policymakers that ownership is usually vested in the head, with other members, particularly women, not owning assets. In fact, agencies responsible for data collection often assert that household members cannot identify individual owners of assets as it is an alien concept to them, or even if they can, they will not do so (presumably to maintain family peace or out of deference to the head of the household). But this has been disproved by the KHAS experience where households willingly identified asset owners.

Asset accumulation High levels of wealth inequality between couples should not be a surprise if we ponder the question of how assets are acquired; usually through the market, state (government programmes), or through inheritance or gifts. Women are disadvantaged in all these aspects.

They are usually homemakers, responsible for childcare, elderly care, and home maintenance. They do not have adequate independent earnings that will enable asset accumulation. We are uniquely placed among other developing countries with a female labour force participation rate of only 33 per cent (2012) compared to 50 per cent globally.

Laws on property ownership within marriage are also crucial to understanding the wealth gap between husbands and wives. India follows a separation of property marital law, which means that assets acquired within marriage remain individual property instead of becoming legally joint property of the couple.

This is different from countries in South America (and Goa in India) where assets acquired after marriage are legally treated as joint property of the couple. Findings from KHAS show that men usually own immoveable property individually, with little joint ownership by couples.

Inheritance continues to be mainly governed by social norms where daughters are not treated on par with sons. Women, too, are reluctant to assert their rights and often give up their claims to inheritance in lieu of family support. This is substantiated from the KHAS data.

About 82 per cent of plots and 56 per cent of residences owned by men were inherited, while the comparable numbers for women were only 21 per cent and 16 per cent, respectively.

It is time to begin unpacking the last major frontier in inequality research by unpacking the dynamics within a household.One place to begin is by replicating the KHAS methodology through small pilots across India’s diverse social and economic contexts.

This will provide a platform for identifying and addressing key challenges involved with such data collection and take us forward in distilling a core set of questions that can be integrated intonational level asset surveys.

(The writer is an assistant professor at the Centre for Public Policy, IIM Bangalore. This article is by special arrangement with the Center for the Advanced Study of India, University of Pennsylvania)

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