ESRI Demographic Variables

Methodology Document

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A NIELSON COMPANY

The What, Why, How and For Whom

• Indicus Analytics – A Nielsen Company• www.indicus.net •

‘Whatever you can rightly say about India, the opposite is also true’ Joan Robinson. India’s vast market is one of the most complex in the world, with more than a billion consumers spread out over more than 640,000 villages, 7926 towns including 490 cities and 298 urban agglomerations having population more than 1lakh and above (as of 2011).

Structure of Indian Economy

No. of States 35

No. of Districts 640

No. of Sub-Districts 5985

No. of Towns 7926

No. of Statutory Towns 4041

No. of Census Towns 3885

No. of Villages 640,867

Source: Census of India 2011

Marketing professionals and researchers have found many different proxies and short-cuts that enable some traction in analyzing the opportunities and pitfalls in benefiting from India’s great market potential. Indicus has been among the foremost research organizations in finding solutions to otherwise intractable research problems. What differentiates Indicus from others is our focus on economic research and an understanding of India’s economic structure at the micro level. This enables us to drill down to finer and finer economic-geographic-demographic cuts. Clients of Indicus products therefore benefit from the same insights and expertise that are valued by our sponsors such as faculty at Harvard, Stanford and Cambridge Universities, experts at the World Bank, Finance Commission, Reserve Bank of India and professionals within civil society and government.

Geographical Coverage:

o State level - data for all states of India (35 states as per Census 2011 figures). o District level - data for all districts of India (631 districts as per Census 2011 Figures). o Sub-district level – there are nearly 5,000 (5861 to be precise) blocks spread

over nearly 622 districts as per Census 2011 figures.

INDIA STATE DISTRICT SUB-DISTRICT

Parameters covered:

Population Workers Indices Asset & Amenities Rates & Ratios

Total population, Gender distribution, Age distribution, Backward caste wise distribution, Households.

Total workers, Non-workers, Main - Marginal distribution, Gender distribution, Agriculture – Non-agriculture distribution.

Income, Expenditure, Poverty, Affluence, Youthfulness, Infrastructure.

Mobile ownership, Source of lighting, Source of drinking water, Source of fuel for cooking, Latrine facility.

Urbanization, Literacy, Gender wise literacy, Spending propensity.

*All data points are estimated for 2012.

Source of data:

All demographic parameters have been estimated on the basis of Census 2011 figures. For Index estimation, we have also incorporated variables from Indicus databases. Indicus databases uses primary survey data from many data sources and consequently millions of records are contained in our extensive database system. Surveys conducted by agencies that have good quality and transparent sampling and survey techniques are accessed and painstakingly logged. These surveys provide detailed insights into household characteristics, their earnings and occupations, their family structure, their expenditure and savings habits as well as how they are changing. The information is from on-going large-scale primary surveys by Indicus, latest available and past rounds of National Sample Survey Organization (NSSO) surveys, National Data Survey of Savings Patterns of Indians (NDSSPI), District - level Household Survey (DLHS), etc. We also compare, contrast, analyze, find relationships and validate the insights from aggregate data available from Registrar General of India, the National Account Statistics(NAS), Central Statistical Organization, Reserve Bank of India (RBI), Economic Census etc.

Parameter / Source

Population - Census of India, 2011

Workers - Census of India, 2011

Indices - Census, 2011 & Estimates based on Metropolitan, Town, Rural

Sudistricts of India-2013-14; Indicus Product

Asset & - Census of India, 2011

Amenities

Rates & - Census, 2011 & Estimates based on Metropolitan, Town, Rural Ratios Sub-districts of India-2013-14; Indicus Product

The Indicus Methodology: Follows techniques of economic research as well as the latest in

small area estimation techniques to develop robust estimates.

Generic Household Survey Problems

Relevant for Susceptible consumer segments

Indicus investigation and solution

Under-reporting Income and expenditure

Upper income segments

Identify extent of under-reporting through analysis of output data from (a) secondary sources (e.g. National Accounts Statistics) and (b) specialized primary surveys and calibrate accordingly

Over-reporting Income expenditure and assets

Lower income segments

Mis-reporting All variables All See patterns of income/ expenditure and savings. Trim large outliers if data from secondary sources. Revisit and resurvey if primary data.

- Inappropriate sampling - Weighting

All variables All - Use scientific survey techniques and power tests to determine sample size - Cross check whether result conforms to the location’s economic structure - Indicus has the largest database of demographic and geographical information in the country and uses this to generate highly accurate weights

Improperly defined coverage area

All variables All - Indicus uses well defined maps and definitions to precisely identify coverage area. - Boundaries of geographical areas (cities, districts, blocks, etc.) are available in Indicus’ GIS databases - When precise boundaries are not available use best available proxies but ensure that they are consistent for all data

Raw Primary Data Indicus, National Sample Survey, National Family and Health Survey, District Level Household Survey, etc.

Basic Database Contains information on all household types across geographic and demographic segments.

Core Database Augmented Database with appropriate weights relevant at national, state, district and sub-district level.

Final Databases Market Skyline of India District Series,

2013-14 Neighbourhood Skyline of India Metro, Town & Rural Skyline of India

The internal structure of the database is synchronous with the economic structure of the location; moreover, the better weighting scheme ensures representative-ness across fine geographic and consumer segments.

• Representative• Fine Segments • Robust and up-to-date • Validated with all known info on Indian economy and consumer markets •

The full range of household and individual types is available for further analysis. This requires that for each district and sub-district geographical unit of interest there are enough data-points for robust results.

Cluster using Neural Networks Find common patterns across geographical and consumer cuts; validate with Indicus data on district economic structure to derive appropriate weights.

Find Patterns with Econometrics Find relationships between individual and household characteristics. Estimate under and un-reported information using these relationships.

Access to raw databases that contain information on socio-economic characteristics and economic activities of households - Income, Expenditure, Saving, Demography, Asset, Gender, Education, Employment, Trends, Age, Family, etc.

Calibration & Distribution Analysis Economic and socio-economic distributions are comparable with credible known information - National Accounts, Registrar General of India, etc.

Indexation

Methodology

Income Index

Expenditure Index

Affluence Index

Youthfulness Index

Infrastructure Index

Poverty Index

The indices are based on variables that are normalized to correct for the differences in the size of the selected geography. The normalization is done by dividing either by population or area so that it is neutral to the size of the state.

All indices except poverty index has been estimated using the range equalization with equal weights method.

For Poverty Index, principal component analysis method has been used.

Index based on average income per household in the corresponding area.

Index based on average expenditure per household in the corresponding area.

A composite index based on households earning high income, asset ownership and SEC Class.

Ratio of population in the age bracket 15-24 years to the total population in the corresponding area.

A composite index comprising ratio of people living in pucca houses, households with an access to safe drinking water, households with sanitation facility, number of households electrified and households with banking facilities.

Ratio of the number of people who fall below the poverty line and the total population in the corresponding area

Literacy rate Spending propensity Urbanization rate

Percentage of literates to the total population aged 7 years and above.

Ratio of annual household expenditure on Food, FMCG, Durable Goods, Clothing and Footwear, Miscellaneous Goods and Services to total household income in the corresponding area.

Total number of urban households by total households in the corresponding area