The Community Well-Being (CWB) Index: Methodological Details

General Information

The Community Well-Being (CWB) Index is a means of measuring socio-economic well-being in First Nations, Inuit and other Canadian communities.  CWB Index scores are derived from Canada's Censuses of Population [Note 1], which are conducted every five years.  Scores have been calculated for 1981, 1991, 1996, 2001 and 2006.

Note that the methodological details provided below pertain to the updated CWB index. A previous version of the CWB index, which included CWB scores for 1981-2001, was based on a somewhat different methodology. “Old” and “new” CWB materials can be distinguished by date of release or publication. Old materials were published prior to 2006. The first of the new materials was released in 2009. New materials are also distinguishable by their inclusion of 2006 data. Old and new CWB scores, and analyses based on those scores, are not comparable.

Defining the CWB Index

A community's CWB index score is a single number that can range from a low of 0 to a high of 100. It is composed of data on income, education, housing conditions and labour force activity. Details on these components are provided below:

1) Income
The Income component of the CWB Index is defined in terms of total income per capita. Calculation of a community's income score is accomplished in three steps:

  1. Every dollar of income received by community members in 2005 is divided by the total population of the community to create per capita income.

  2. Per capita income is transformed into its logarithm.  This is done to account for “the diminishing marginal utility of income.”  According to this principle, those who occupy lower income strata will benefit more from additional income than those at higher income levels (Cooke, 2007, p.29).

  3. The logarithm of per capita income is converted to a scale of 0 -100, like the other components of the index.  To do this, a “theoretical range” of total income was established to approximate the 0 - 100 range within which the other components naturally fall.  A range of $2,000 to $40,000 dollars was used because it coincides with the approximate lowest and highest incomes per capita found in Canadian communities.  In the rare cases where a community's income per capita fell outside of this range, it was recoded to either $2,000 or $40,000. 

These three steps are summarized by the formula below:

The example below illustrates how an income score is calculated for a community with $10,000 per capita income:





Income Score = 53.79

2) Education This component is comprised of the following two variables:

  1. "high school plus": the proportion of a community's population, 20 years and over, that has obtained at least a high school certificate.

  2. "university": the proportion of a community's population, 25 years and over, that has obtained a university degree at the bachelor's level or higher.

Having at least a high school education has a particularly profound impact on one's options in contemporary Canada. Accordingly, a community's "high school plus" score has more impact than its "university" score on its overall education score. Specifically, the high school plus variable accounts for two-thirds of the education component.

3) Housing
The housing component comprises indicators of housing quantity and quality. Housing quantity is defined as the proportion of the population living in dwellings that contain no more than one person per room. The ratio of persons to rooms is calculated by dividing the number of household members by the number of rooms in the dwelling they occupy. A room is defined as "enclosed area within a dwelling which is finished and suitable for year-round living" (Statistics Canada, 2007, online).

Housing quality is defined as the proportion of the population living in dwellings that are not in need of major repairs. "Major repairs refer to the repair of defective plumbing or electrical wiring, structural repairs to walls, floors or ceilings, etc." (Statistics Canada, 2007, online).

4) Labour Force Activity
This component is comprised of the following two variables:

  1. labour force participation: the proportion of the population, aged 20-65, that was involved in the labour force in the week prior to census day (Sunday, May 7, to Saturday, May 13, 2006).

  2. employment: the percentage of labour force participants, aged 20-65, that was employed in the week prior to census day (Sunday, May 7, to Saturday, May 13, 2006).

Availability of Data

CWB scores have been calculated for 1981, 1991, 1996, 2001 and 2006. Scores for 1986 were not calculated as information on dwelling condition was not collected in the 1986 census. [Note 2]

CWB scores from a given census are available for every community in Canada that meets the following criteria:

  1. It had a 2a and 2b population of at least 65 [Note 3].

  2. It was not an "incompletely enumerated reserve." A reserve is deemed incompletely enumerated if it was not permitted to be enumerated or if enumeration was incomplete or of insufficient quality [Note 4].

  3. Its global non-response rate was not greater than or equal to 25%. Global non-response rate is the percentage of required responses left unanswered by respondents [Note 5].

Small communities are subject to "income suppression": Statistics Canada does not release income information on communities with populations less than 250, or that contain fewer than 40 households [Note 6]. Accordingly, income scores are not published for communities subject to income suppression. In such cases, the other three component scores (education, housing, and labour force activity) are also suppressed since they could be used, in conjunction with the overall CWB score, to reverse engineer the income score. Note that component scores for communities subject to income suppression are included in calculations of component statistics (e.g. mean income score for First Nations, Inuit and other Canadian communities).

Defining "Communities"

Communities are defined in terms of census subdivisions (CSDs). CSDs are municipalities or areas (such as Indian reserves) that are regarded as the equivalent of municipalities. Municipal status is defined by provincial and territorial laws [Note 7].

For purposes of comparison, communities are categorized as either First Nations (FNs), Inuit communities (ICs) or Other Canadian communities (OCCs). First Nations comprise those communities that Indian and Northern Affairs Canada (INAC) and Statistics Canada classify as "on-reserve." First Nations communities include all CSD types that are legally affiliated with Indian Bands as well as several CSDs of other types that are located in Northern Saskatchewan, the Northwest Territories and the Yukon Territory. The eight CSD types that are legally affiliated with Indian bands are [Note 8]:

Indian reserve (IRI)
Indian settlement (S-É)
Indian government district (IGD)
Terres réservées aux Cris (TC)
Terres réservées aux Naskapis (TK)
Nisga'a village (NVL)
Nisga'a land (NL)
Teslin land (TL)

First Nations communities that are not legally affiliated with Indian bands were first identified as "on-reserve" by INAC in 1996. For consistency, in analyses of 1981 and 1991 CWB scores, those communities are classified as First Nations.

Inuit have completed four land claims across Canada's north. These four regions include Nunatsiavut, Nunavik, Nunavut and the Inuvialuit region, and are known as Inuit Nunangat (place where Inuit live). Each has some form of public or self-government. For purposes of the CWB, communities within any of these four regions with a population large enough to allow analysis (i.e. larger than 65 individuals) are classified as Inuit communities.

Those CSDs that are neither First Nations nor Inuit communities are classified as other Canadian communities. It is important to note that some other Canadian communities have substantial Aboriginal populations. It is also worth noting that others who use the CWB index may choose to classify communities in different ways. For example, one could reclassify other Canadian communities with substantial Métis populations as Métis communities.

Comparing CWB Index Scores across Time

Four issues complicate the comparison of CWB scores across time. They are detailed below.

1) Inflation Owing to inflation, the value of a dollar tends to decrease over time. A dollar in 1980, for example, was "worth" considerably more than a dollar in 2005. To ensure that CWB is measuring actual changes in income rather than the effects of inflation, the income component of the CWB is adjusted to account for inflation. Specifically, incomes from the 1981-2001 censuses were transformed into 2005 dollars prior to calculation of 1981-2001 income scores. Income data from the 2006 census did not have to be adjusted as it was already measured in 2005 dollars (since 2006 census respondents were asked to report income received in 2005).

Adjustments to 1981-2001 income data were based on Consumer Price Index (CPI) annual averages [Note 9]. According to the CPI, a dollar in 1981, 1991, 1996 and 2001 was equivalent to $2.43, $1.36, $1.22, and $1.12 in 2005, respectively [Note 10]. The CPI is

an indicator of the changes in consumer prices experienced by Canadians. It is obtained by comparing, through time, the cost of a fixed basket of commodities purchased by Canadian consumers in a particular year. Since the basket contains commodities of unchanging or equivalent quantity and quality, the index reflects only pure price movements. (Statistics Canada, 1996, p.1)

The CPI is only one of many measures of inflation, and it is not perfect. It is important to recognize, therefore, that income fluctuations (or lack thereof) observed in the CWB Index may still be affected by inflation.

2) Missing Data
CWB scores not available for all communities in all census years. As indicated above, scores may be missing for a community in a given year because of non-participation in the census, inadequate data quality, or insufficient population size.

3) Changes in Community Boundaries
Communities can experience "boundary changes" between censuses. They can merge with other communities, divide into two or more communities, annex parts of other communities, etc. When this happens, it can be difficult to know what caused a change in a community's CWB Index score from one census to the next. Imagine, for example, that a community's score went from 70 in 1981 to 80 in 1991. If the community experienced a boundary change whereby it annexed part of another community, the improved CWB score could have been the result of a "real" change in the well-being of the original community, or a consequence of higher well-being in the annexed area.

Sensitivity analyses were conducted to assess the impacts of boundary changes on average CWB scores for First Nations, Inuit and other Canadian communities over time. First, communities with significant boundary changes were identified. A community was classified as having undergone a significant boundary change between consecutive censuses if its adjusted population was more than 110% or less than 90% of its original population. Multiple sets of average CWB scores for the three community types were then calculated. One set included all communities. The other sets excluded communities that had undergone significant boundary changes during specified periods. For example, one set of 2006 CWB scores excluded communities that experienced significant boundary changes between 2001 and 2006. Another set of 2006 CWB scores excluded communities that experienced significant boundary changes between 1996 and 2006. Comparisons of the different sets of average CWB scores demonstrated that boundary changes had little effect on national or regional average CWB scores.

While national and regional average CWB scores may be safely compared across time, however, boundary changes can seriously impact the comparability of individual communities across time. Likewise, boundary changes can affect the comparability of statistics across time if they are based on community groupings other than those to which the sensitivity analysis described above pertains (i.e. three types of communities in eight regions [Note 11]). Researchers who wish to compare individual communities or user-defined groups of communities across time, therefore, are encouraged to consider the possible effects of boundary changes. Statistics Canada publishes details of boundary changes annually in an Interim List of Changes to Municipal Boundaries, Status, and Names. Statistics Canada products like Geosuite (and its predecessor Georef) provide summaries of boundary changes. For example, 2001 Geosuite provides adjusted 1996 CSD populations. An adjusted 1996 population is the population a CSD would have had in 1996 if the boundary change that occurred between 1996 and 2001 had already been in effect in 1996. These adjusted 1996 populations can be compared to original 1996 populations (e.g. in 1996 Georef) to assess how much the population of a given CSD "changed" as a result of boundary changes.

4) Sampling Error The CWB is based on data from the 20% sample of households that received the "long form" of the census. Consequently, it is possible that a fluctuation (or lack thereof) in an individual community's CWB score from one census to the next is actually the result of sampling error. It is difficult to ascertain the impact of sampling error on a given community in a given census, though impact generally decreases as the population of a community increases. Researchers are reminded to interpret individual CWB scores with caution, and to emphasize general trends rather than census-to-census fluctuations. Notably, all households in reserves and remote communities receive the long form of the census. Sampling error is not an issue for such communities.

More specific request for data or information should be directed to INAC's Public Enquiries Centre.

E-mail: Infopubs@ainc-inac.gc.ca
Phone: (toll-free) 1-800-567-9604
TTY: (toll-free) 1-866-553-0554

References:

Cooke, M. (2007). The Registered Indian Human Development Indices: Conceptual and methodological issues. In Jerry P. White, Dan Beavon and Nicholas Spence (Eds.), Aboriginal well-being: Canada's continuing challenge (pp.25-47). Toronto: Thompson Educational Publishing.

Statistics Canada . (2007). 2006 Census Dictionary. Statistics Canada Catalogue no. 92-566-XWE. Ottawa, Ontario. February 14.

Statistics Canada. (1996). Your Guide to the Consumer Price Index. Ottawa: Minister of Industry. Catalogue no. 62-557-XPB.

Footnotes:

  1. Detailed information on Canadian census data is available from Statistics Canada (return to source paragraph)

  2. Owing to the large number of First Nations that did not participate in the 1986 census, developers opted to exclude the 1986 census from the CWB time series rather than to exclude dwelling condition from the CWB index. (return to source paragraph)

  3. The 2a population is the 100% population: the total population captured by both the short and long forms of the census. The 2b population is an approximation of the 100% population derived from the 20% sample of the population who completed the long form of the census. Detailed information on sampling and weighting in the 2006 Census of Canada is available from Statistics Canada (return to source paragraph)

  4. Detailed information on incompletely enumerated reserves in 2006 is available from Statistics Canada (return to source paragraph)

  5. Detailed information on census data quality is available from Statistics Canada (return to source paragraph)

  6. Income suppression rules were not identical in all census years. Details are available from Statistics Canada (return to source paragraph)

  7. Detailed information on the geographical concepts used in the Census of Canada are available from Statistics Canada (return to source paragraph)

  8. Detailed information on CSD types is available from Statistics Canada (return to source paragraph)

  9. Details of the CPI and other measures of inflation are available from Statistics Canada (return to source paragraph)

  10. Income adjustment involved multiplying 1981, 1991, 1996 and 2001 incomes by 2.431818182, 1.364795918, 1.221461187 and 1.121593291, respectively. (return to source paragraph)

  11. Atlantic, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia and the Territories (return to source paragraph)