Study Suggests Common Tool for Measuring Socioeconomic Disparities May be Flawed

ALBANY, N.Y. (May 15, 2023) - A recent study by UAlbany School of Public Health researchers published in the journal Health Affairs suggests that a common tool used to assess socioeconomic disadvantages may suffer from serious flaws.

The Area Deprivation Index (ADI) is a proxy measure for assessing the extent of a region’s socioeconomic disadvantages. It was developed in 2003 to help fill a growing need for a national deprivation index that could be consistently and universally used for directing health interventions and for adjusting quality measures and payments. It combines information about seventeen different variables into a single number, which functions as an overall indicator of the socioeconomic health of a given community.

The ADI has been popularized and made more user friendly by the Neighborhood Atlas at the University of Wisconsin, which translates ADI components into a summary measure without supplying details on how it is done. The Neighborhood Atlas ADI has been used in scores of peer-reviewed studies and has received millions of dollars of funding.

Edward L. Hannan, Yifeng Wu, and Kimberly Cozzens of the UAlbany Cardiac Quality Improvement Initiative discovered when looking at New York State data that median home value, which is one of the seventeen variables used to calculate the ADI by the Neighborhood Atlas, has an inflated impact on the overall score.

“We found that the downstate regions of the state with high median home values (low deprivation) that were clearly deprived with respect to most other ADI variables—high poverty rates, low education rates, high unemployment rates, and so on— were nonetheless rated as having very low mean deprivation,” Hannan, who is also a distinguished professor emeritus in the Department of Health Policy, Management and Behavior, explains. The reason for this is that the median home value, which is typically in the hundreds of thousands of dollars, is weighted similarly to other measures that range in magnitude from zero to one without appropriately standardizing the measures before weighting.

To validate their results, the authors repeated their analyses for California and Vermont and found similar patterns. The authors emphasize that the problems they identified are “not fatal flaws” and that there are several strategies that researchers could use to address the problem. There are also other indices for measuring socioeconomic disparities that do not suffer from the same type of bias.

While investigating the role of home value in the calculation of the ADI, Hannan and colleagues identified additional areas that need improvement. For example, the percentage of households without a motor vehicle might serve as a proxy for deprivation in a rural area, but it does not have the same meaning in an urban area with reliable and inexpensive public transportation. These types of flaws are important to identify because they can have real-world consequences and may even further exacerbate inequality if they are not remedied.

Hannan and colleagues also contend that median home value is not an ideal measure of deprivation even when weighted correctly. Property values, the authors explain, do not always translate to greater wealth for local residents.

“A $200,000 home in New York City, for instance, has different meaning than a $200,000 home in upstate New York,” Hannan says. “Also, a sudden increase in local property value does not necessarily translate into changes in perceived wealth for populations that are unable to move because of work, family, or other constraints.”

This study also further highlights the need for a continuously evaluated national deprivation index similar to those used in the United Kingdom and New Zealand. Such a measure would give public health researchers a robust tool to study health disparities and find new solutions to bridge them.

“An updated index will need continuous evaluation and modification to be effective,” Hannan says.