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Wealth Breakdown
What is a wealth breakdown?
A wealth breakdown is a process of dividing a population within one livelihood zone into groups that share the same range of options for obtaining food and cash income, similar levels of income and similar expenditure requirements. Wealth breakdowns in HEA link combinations of livelihood capital (land, labor, productive assets, etc.) to different households in the community, and help define the network of relationships within and outside of the community that allow people to live. "Wealth breakdowns" should not to be confused with "wealth ranking", which refers to a technique in which indicators of wealth (such as roofing, or bike ownership) are correlated with different levels of wealth, and households are then grouped accordingly. Wealth breakdowns help one to define causal relationships; wealth ranking tends to be used to count the number of households in pre-defined categories.
Why is a wealth breakdown necessary?
Wealth determines who has access to what, how people will be affected by different shocks, and which people will be able to take advantage of new opportunities.
Understanding these differences in wealth is therefore essential for ensuring appropriate targeting of everything from emergency assistance to development project activities.
