Assets as a Socioeconomic Status Index: Categorical Principal Components Analysis vs. Latent Class Analysis.

Abstract

There is no gold standard to measure SES. Therefore, it is not possible to definitely say that a specific method is better than another one. LCA is a complicated method that presents detailed information about latent variables and required one assumption (local independency), while NLPCA is a simple method, which requires more assumptions. Generally, NLPCA seems to be an acceptable method of analysis because of its simplicity and high agreement with LCA.