Concentration Index
Also known as: Health Concentration Index, Concentration Curve and Index, Wagstaff Concentration Index, Erreygers Corrected Concentration Index
The concentration index is the standard summary measure of socioeconomic inequality in health: it quantifies the degree to which a health outcome - illness, mortality, malnutrition, or healthcare use - is disproportionately concentrated among the poor or the rich. It is built from the concentration curve, which plots the cumulative share of health against the cumulative share of the population ranked from poorest to richest, and the index is simply twice the area between that curve and the line of perfect equality. Wagstaff, Paci, and van Doorslaer's 1991 critique of inequality measures argued that, unlike the simple range or the Gini, the concentration index properly reflects the socioeconomic dimension of health inequality and the experience of the whole distribution. Kakwani, Wagstaff, and van Doorslaer's 1997 paper then supplied a computational formula, a convenient regression estimator, and the asymptotic variance needed for statistical inference. The index ranges from minus one to plus one, with zero meaning no socioeconomic gradient, a negative value meaning ill health concentrates among the poor, and a positive value the reverse. It has become the lingua franca of health-equity monitoring at agencies like the World Bank and WHO.
Key highlights
- Reflects the socioeconomic dimension of inequality by using SES ranks, capturing the social gradient rather than mere dispersion.
- Summarizes the entire concentration curve in one signed number whose direction and magnitude are easy to interpret.
- Comes with a convenient regression estimator and closed-form variance, enabling standard errors and significance tests in any package.
- Extends naturally to decomposition, attributing measured inequality to underlying determinants of health.
Intuition
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How it works
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When to use it
Use the concentration index when you want a single, comparable number for how strongly a health outcome is patterned by socioeconomic status and you have both an outcome and a ranking variable for SES. It is ideal for monitoring trends over time, comparing inequality across countries or regions, and feeding inequality into decomposition analyses that attribute it to determinants. Because it weights the whole distribution and uses SES ranks, it is preferable to crude rich-poor ratios or range measures when you care about the social gradient itself. It is less appropriate when you lack a meaningful SES ranking, when groups are nominal and unordered (where between-group measures like the Theil index fit better), or when the outcome is bounded and you neglect the necessary normalization. For binary or bounded outcomes, always pair it with an Erreygers- or Wagstaff-type correction so cross-population comparisons remain valid.
Strengths & limitations
- Reflects the socioeconomic dimension of inequality by using SES ranks, capturing the social gradient rather than mere dispersion.
- Summarizes the entire concentration curve in one signed number whose direction and magnitude are easy to interpret.
- Comes with a convenient regression estimator and closed-form variance, enabling standard errors and significance tests in any package.
- Extends naturally to decomposition, attributing measured inequality to underlying determinants of health.
- The standard index for bounded outcomes depends on the mean, so naive comparisons across populations with different prevalence are misleading.
- It captures only the relative, rank-based gradient and says nothing about absolute gaps between rich and poor.
- Results hinge on the choice and quality of the SES ranking variable, which is often a noisy asset index.
- A single index can mask non-monotonic patterns and crossing concentration curves that only the full curve reveals.
Common pitfalls
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Applications
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Frequently asked
What do the sign and magnitude of the concentration index mean?
The index runs from minus one to plus one. A value of zero means the health variable is distributed independently of socioeconomic status - no gradient. A negative value means the outcome is concentrated among the poor, which for an adverse outcome like illness signals pro-rich inequality; a positive value means it concentrates among the better-off. The further from zero, the stronger the concentration. So a concentration index of minus 0.2 for child stunting indicates that stunting is substantially more prevalent among poorer children.
How does the concentration index differ from the Gini coefficient?
The Gini measures inequality in a single variable - say income - ranking people by that same variable. The concentration index measures inequality in one variable (health) while ranking people by a different variable (socioeconomic status). This bivariate, rank-by-SES construction is what lets it capture the social gradient in health specifically. If you ranked people by their health and measured health inequality, you would get the health Gini; ranking by income instead yields the concentration index, which is the quantity health-equity research cares about.
Why does the index need correction for binary or bounded outcomes?
For an unbounded continuous variable the concentration index ranges freely over minus one to plus one, but for a bounded variable - a 0/1 indicator or a capped score - its attainable range shrinks and depends on the mean. That means two populations with identical underlying inequality but different prevalence can show different indices, biasing comparisons. Normalizations such as the Erreygers correction rescale the index by the mean and range so it behaves consistently and satisfies sensible axioms, making it safe to compare across populations.
Sources
- 1.Wagstaff, A., Paci, P., & van Doorslaer, E. (1991). On the measurement of inequalities in health. Social Science & Medicine, 33(5), 545-557.
- 2.Kakwani, N., Wagstaff, A., & van Doorslaer, E. (1997). Socioeconomic inequalities in health: Measurement, computation, and statistical inference. Journal of Econometrics, 77(1), 87-103.
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Cite this page
ScholarGate. (2026, June 23). Concentration Index. ScholarGate. https://scholargate.app/social-epidemiology/concentration-index