Measuring living standards with proxy variables

Very few demographic surveys in developing countries have gathered informat ion on household incomes or consumption expenditures. Researchers intereste d in living standards therefore have had little alternative but to rely on simple proxy indicators. The properties of these proxies have not been anal yzed systematically. We ask what hypotheses can be tested using proxies, an d compare these indicators with consumption expenditures per adult, our pre ferred measure of living standards. We find that the proxies employed in mu ch demographic research are very weak predictors of consumption per adult. Nevertheless, hypothesis tests based on proxies are likely to be powerful e nough to warrant consideration.