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 Table of Contents  
ORIGINAL ARTICLES
Year : 2021  |  Volume : 9  |  Issue : 1  |  Page : 22-26

Revised socioeconomic status scales for the year 2021: Updation based on latest base year series 2016


Department of Preventive and Social Medicine, All India Institute of Hygiene and Public Health, Kolkata, West Bengal, India

Date of Submission06-May-2021
Date of Acceptance02-Jun-2021
Date of Web Publication24-Nov-2021

Correspondence Address:
Biswadip Chattopadhyay
11, Paramahangsa Dev Road, P.O. Nabagram District, Hooghly - 712 246, West Bengal.
India
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Source of Support: None, Conflict of Interest: None


DOI: 10.4103/dypj.DYPJ_25_21

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  Abstract 

Context: Most of the public health and medical research include economic and social status as one of the pertinent predictors for health-related variables at the individual or family level. Modified B. G. Prasad scale (1961) and Modified Kuppuswamy scale (1976) are two of the most widely used socioeconomic status scales in India for health and social research. The income ranges in these scales need a frequent update with a rapidly growing economy and changing consumption patterns with time. Aim: This study revised the Modified Kuppuswamy and B. G. Prasad scales by updating income ranges as per the latest consumer price index (CPI) numbers of industrial workers (IW) and latest base year (2016) extracted from the Labour Bureau, Government of India. Methodology of the Study: Multiplication and conversion factors were calculated using CPI-IW (base year 2016 = 100) and linking factor. Updated income ranges for the Modified Kuppuswamy scale were estimated after calculating the multiplication factor (MF) between the year 1976 and the present year, whereas linking factor 2.88 and MF 1.20 have been used to calculate the income limits for the Modified B. G. Prasad scale. Results: The updated income range of the Modified B. G. Prasad and Kuppuswamy scale was estimated to be 78.89 and 26.46 times the income range values of the original scales (1961 and 1976), respectively. Conclusion: This update is relevant and highly needed after the introduction of the latest series of the base year in 2020, without which the income ranges would have been overestimated if calculated with the previous series (Base year 2001 = 100).

Keywords: 2021 update, BG prasad scale, economic status, kuppuswamy scale, socioeconomic scale


How to cite this article:
Sahu M, Das A, Chattopadhyay B, Paul B, Bhattacharyya M. Revised socioeconomic status scales for the year 2021: Updation based on latest base year series 2016. D Y Patil J Health Sci 2021;9:22-6

How to cite this URL:
Sahu M, Das A, Chattopadhyay B, Paul B, Bhattacharyya M. Revised socioeconomic status scales for the year 2021: Updation based on latest base year series 2016. D Y Patil J Health Sci [serial online] 2021 [cited 2021 Nov 27];9:22-6. Available from: http://www.dypatiljhs.com/text.asp?2021/9/1/22/331109




  Introduction Top


Socioeconomic status (SES) is an important determinant of health-related outcomes in sociology and public health research. SES influences individual‚s and families ‚ purchasing power, affordability, and accessibility to various resources as well as their judicial utilization. Adverse birth outcomes, malnutrition, unhealthy parenting, domestic violence, unhealthy lifestyles, substance abuse, mental illness, poor reproductive health, maternal mortality, etc., are the various forms of adverse health-related outcomes that are strongly associated with SES as evident by various research works.[1],[2]

SES reflects the position of an individual or a family in the social hierarchy. The capability of SES to determine the economic and social status of a person stems from the fact that it encompasses income, education, occupation, family effluences, social participation, and political influence. Though there is no direct indicator for measuring the social status of an individual or family, it can be determined indirectly by either people‚s educational status, occupational status, financial status, or combination of them.

Various scales have been proposed and accepted for determining the SES of families in both urban and rural setting in India, namely Rahudkar Scale (1960), Udai Pareekh Scale (1964), Jalota Scale (1970), Kulshrestha Scale (1972), Kuppuswamy Scale (1976), Shrivastava Scale (1978), and Bharadwaj Scale (2001).[3],[4],[5] Kuppuswamy and B. G. Prasad SES scales are the two most commonly used scales in India for public health studies.

B. G. Prasad‚s socioeconomic scale is applicable for both rural and urban areas and it considers only the per capita monthly income. Due to simplicity in calculation and applicability for both rural and urban settings, it is being widely used. This scale was first introduced by B. G. Prasad in 1961 and later modified in 1968 and 1970 by himself.[6],[7],[8] While devising the original scale in 1961, income ranges were calculated using 1960 as the base year (1960 = 100). Later, a new base has been released in 1982 and 2001 by the Labour Bureau of India and it had been updated accordingly by other researchers.[9]

The Modified Kuppuswamy Scale specializes to measure SES among families residing in urban and peri-urban areas. The scale was first constructed by Kuppuswamy in 1976 and thereafter, has been modified several times. It consists of a composite score which includes the occupation of the head of the household, educational level of the head of the household, and monthly income of the family, yielding a score with a range of three to 29.[10] This scale classifies the families into five distinct socioeconomic strata. The occupational and educational component generally does not undergo any temporal changes, but the scoring of the income category of the scale loses its relevance with the change in the value of Indian national rupees (INR). The monthly income of the family was calculated in the original Kuppuswamy scale 1976, considering the base year 1960 = 100. Later, it was revised by Mishra and Singh in 1998,[10] taking base year 1982 = 100, and later modified in the year 2007 with the base 2001 = 100.[11],[12]

Rapid economic growth and swift transformation in individual consumption patterns and social structure render original versions of these scales ineffective in accurately measuring the SES of the present time. Therefore, an update of these scales based on inflation rates and newly released base years is necessary.

This study aimed to update the modified versions of the B. G. Prasad Scale and Kuppuswamy Scale for January 2021 considering the latest Labour Bureau statistics (Base year 2016 = 100).


  Methodology of the Study Top


For updating B. G. Prasad and Kuppuswamy Scale, we have calculated income ranges based on the latest consumer price index (CPI)-industrial workers (IW) (base year 2016 = 100) released by the Labour Bureau, Government of India. First, we need to understand the fundamental Labour Bureau statistics, like CPI-IW, base year, linking factor, multiplication, and conversion factors.

The CPI is a measure that examines the weighted average of prices of a basket of consumer goods and services. These goods and services are divided into eight major groups: housing, apparel, transportation, education and communication, food and beverages, medical care, recreation, and other goods and beverages. CPI is widely considered as the proxy for inflation. The CPI values are interpreted regarding a base year and it is updated monthly by the Labour Bureau. Income ranges change in proportional to the changes in CPI numbers of IW [Table 1] and [Table 2].
Table 1: Monthly consumer price index- industrial workers for the year 2020 (base year 2001=100)

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Table 2: Monthly consumer price index-industrial workers for the year 2020 (base year 2016=100)

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Base years are years when Labour Bureau revises economic valuation based on the change in consumption pattern and global financial circumstances. Due to the rapid influx of consumer-dominant economic models in recent years, the gap between the two base years is gradually reducing. On base years, CPI is changed into 100. The earlier base years were 1960, 1982, and 2001. The CPI-IW was initially introduced with a base of 1960 = 100 based on the results of the family living survey conducted in 1958–1959 at 50 industrially important centers. This series was updated on base 1982 = 100, and again in 1999–2000, it has been further updated the base on 2001 = 100.[13],[14]

A linking factor is a quantity by which an earlier base year CPI numbers need to be multiplied to convert into the new CPI values under the next base year to maintain the currency valuation. For example, the value of the Linking factor between base years 1960 and 1982 was 4.93, between 1982 and 2001 was 4.63 and between 2001 and 2016 is 2.88.[15]

Conversion and multiplication factors (MFs) are two statistical parameters that need to be included during estimating the valuation of income of the family in SES scales. The conversion factor of a particular year by a particular base year is the Ratio of CPI-IW of that particular year by the previous base year and CPI-IW of that particular base year by the previous base year multiplied by 100. MF is needed to multiply with the income values of the original scale along with linking factors, to estimate the current income ranges [Table 3].
Table 3: Calculation of multiplication factors for Modified Kuppuswamy Scale and B.G. Prasad Scale

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Calculation of B. G. Prasad scale

New income value = Old income value (Base 1960 = 100) ×4.63 × 4.93 × 2.88 × MF.[16]

For Kuppuswamy Scale, the new income value will be, old income value × MF, which is estimated from dividing CPI-IW of 2020 November by that of 1976 by base year 1982 = 100 with the help of linking factors.


  Results Top


Based on the above methodology, we calculated the revised income ranges for B. G. Prasad and Kuppuswamy Scale.

The calculation for the update in income ranges for socioeconomic classes in Modified Kuppuswamy Scale as per CPI of November 2020 (base year 2016 = 100):

The monthly income of a family in INR for 1976 was estimated according to the base year 1960 = 100 (using the CPI for 1976 as 296) and this increased to 490 in the year 1982.

The conversion factor of 1976 by the base year of 1982 is 60.41, as written earlier. So, for updating the latest Kuppuswamy SES scale, we have to find out the MF. For that, the latest CPI-IW (November 2020) must be estimated by the same base year.

So, the CPI-IW of November 2020 by the base year (2016 = 100), is 119.9.

Therefore, the CPI-IW by the earlier base year (2001 = 100) will be 119.9 × 2.88 (linking factor between bases 2001 and 2016) = 345.3.

CPI-IW of 2020 November by base year (1982 = 100) will be 119.9 × 2.88 × 4.63 (linking factor between bases 1982 and 2001) = 1598.79.

So, the MF of November 2020 from the origin year of 1976 will be:

1598.79 ÷ 60.41 = 26.465. So, 26.465 need to be multiplied to the monthly income ranges of the original scale (1976) to get an estimation of current income ranges in the Kuppuswamy SES scale [Table 4].
Table 4: Updated Modified Kuppuswamy Scale for 2021 based on labor bureau statistics of November 2020

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Calculation of the income ranges for socio-economic classes in B. G. Prasad Scale as per CPI of November 2020 (base year 2016 = 100):

For socioeconomic class V, per capita income must be < 15 × 4.93 × 4.63 × 2.88 × 1.20 = 1183.29 ≈ 1183.

The lower limits of per capita income are:

Socioeconomic class IV: 15 × 4.93 × 4.63 × 2.88 × 1.20 = 183.29 ≈ 1183

Socioeconomic class III: 30 × 4.93 × 4.63 × 2.88 × 1.20 = 2366.58 ≈ 2367

Socioeconomic class II: 50 × 4.93 × 4.63 × 2.88 × 1.20 = 3944.31 ≈ 3944

Socioeconomic class I: 100 × 4.93 × 4.63 × 2.88 × 1.20 = 7888.63 ≈ 7889.

The upper limits of PCI are calculated by subtracting 1 from the lower limits of PCI of immediate upper socioeconomic class [Table 5].
Table 5: Updated B.G. Prasad classification scale for January 2021 based on labour bureau statistics of November 2020

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  Discussion Top


Since 1946, the Labour Bureau under the Labor Ministry of India has been compiling and updating CPI-IW. The new series (Base year 2016 = 100) of CPI-IW has been released in September 2020 after 2001 (last base year 2001 = 100).[13],[14] The methodology followed for calculating the new base year is more robust. The number of centers covered in the new series has increased to 88 from 78 across different States in India, again covering 317 markets (the old series covered 289 markets) for collecting the retail price of various consumables. The total sample size was increased from 41,040 families to 48,384. After careful observation on consumers‚ expenditure pattern, the total number of items (around 463 in place of 392 in the old series) in the consumer basket and their composition have been revised with more weightage given on health, education, recreation, transport, communication, personal care, household goods and services, and weightage to food and beverages have been reduced. The new series is claimed to be more representative and reflects the latest consumption pattern of the IW.[14] The base year revision helps to determine minimum wages of the IW and more realistic CPI-IW, considering the rapidly changing economy, market retail price of the consumables for daily living, and consumers‚ changing needs and expenditure patterns. This study used the latest base year (2016 = 100) reflecting the latest consumption trends and avoiding any overestimation of valuation and income ranges. For instance, while updating the Modified Kuppuswamy SES scale for the year 2020, Saleem used the base year of 2001 which resulted in a gross overestimation of income ranges.[17] Sharma devised an online interactive calculator for a real-time update for Kuppuswamy and Prasad socioeconomic scale.[18],[19] Shaikh and Pathak revised the Kuppuswamy and B. G. Prasad socioeconomic scales for 2016 using this online tool.[20] But the tool also has lost its validity with the introduction of the latest base year (2016 = 100).

Both B. G. Prasad and Kuppuswamy SES Scale have few intrinsic limitations. B. G. Prasad‚s scale does not consider factors other than income. Many social scientists opined that only income cannot truly reflect any individual or family‚s SES.[9],[21] B. G. Prasad scale has the criticism of being too simplistic to be a valid scale for measuring SES. On the other hand, the income scale in the Kuppuswamy Scale entails total family income instead of per capita family income and it overestimates the economic categorization in the case of large families.[22] The three components of Kuppuswamy Scales are somewhat interrelated. Occupation is dependent on educational status while economic status is dependent on occupation pursued. Moreover, revisions in the educational and occupation categories of the Modified Kuppuswamy Scale are also desirable taking into account the various educational degrees conferred in the current era as well as variations in a range of occupations with the advancement of technology. For example, with the advent of digital technology, a plethora of relatively new jobs in digital (social) media and information communication sectors have developed which are difficult to be categorized in the occupational subscale of the Kuppuswamy scale.

Kuppuswamy and B. G. Prasad Scale only measure income but cannot assess the true wealth of the families. Families with valuable assets but low income might be categorized in lower classes.

Limitations

In this update, we calculated the change in income ranges with CPI-IW. But, the CPI of rural and agricultural workers was not considered during the calculation. This could create inconsistency and nonreliability in measuring SES among families in rural area. All India CPI was used in this update, but it will be best to use state-specific and region-specific CPI values by researchers in their respective areas along with the latest CPI.


  Conclusion Top


Socioeconomic stratification of the community based on updated price indices is of utmost importance to the policymakers to understand the affordability of the community and their purchasing capacity for seeking health services. The current study updated income ranges for determining socioeconomic classes in two of the most widely used socioeconomic scales considering the latest base year of 2016 and the latest CPI-IW. This update bears special significance as the income ranges for both the scales calculated in the current study, have averted the misclassification of SES by avoiding overestimation of income ranges.

Financial support and sponsorship

Nil.

Conflicts of interest

There are no conflicts of interest.



 
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    Tables

  [Table 1], [Table 2], [Table 3], [Table 4], [Table 5]



 

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