Imperfection Measures and the Production of Poverty: A Case Study of the Use of the Asset Index in Bangladesh

This paper takes as its starting point the analytical distinction between a 'difference-making' approach and a 'production approach' to poverty, both of which relate to the causes of poverty and how it is measured. Although asset indices have been criticized for merely addressing correlates of poverty, we maintain that it can in fact provide an understanding of households' conditions of reproduction and in turn, reflect upon relational aspects of poverty. We draw on household surveys in two selected villages in Bangladesh and use an asset index as a proxy for overall level of welfare. The asset scores were able to distinguish across sharecropper households but could not distinguish across landholdings, except in one site. Moreover, the asset scores show how migration can have transformative effects on welfare outcomes and at the same time constitute a fragile and uneven process that does not reap benefits to all. We demonstrate how the asset index, albeit an imperfect measure, when carefully constructed, can in fact shed light on the structural causes of poverty.