The study of segregation of deprivation can provide a tool to determine the economic, social and institutional factors associated with spatial unevenness in the distribution of wealth. Segregation is linked to social exclusion, diminished opportunities for human capital development and lower access to public services. In comparison to descriptive measures of poverty segregation, a multilevel structural equation modelling approach allows us to make statistical inferences about segregation, and to assess the extent to which segregation can be explained by contextual variables. Previous research using multilevel models to analyse segregation is extended to handle a continuous latent variable, measured by multiple binary indicators. The proposed approach is used to quantify the extent to which household deprivation is clustered within communities in Bolivia and to explore contextual factors associated with between-community differences in deprivation. Bolivia had one of the worst performances in poverty headcount ratio and chronic malnutrition in Latin America in the first decade of the twenty-first century, according to World Bank data. Bolivia is found to have a high level of segregation, since the main source of variation in deprivation arises from differences across communities, rather than within communities. Ethnicity, education, administrative region, distance to urban centres, and drought-induced migration significantly predict differences in the mean level of deprivation across Bolivian villages. This analysis helps to identify clusters of deprivation and highlights crucial sectors to be developed in order to reduce unevenness in the distribution of deprivation.

Three mechanisms related to household living standards might affect early-age mortality: the absolute level of deprivation, its level relative to the average of the community, and the inequality in the distribution of deprivation within communities. A large body of literature has explored the effect of the absolute level of deprivation, but little research has examined the association between relative deprivation and early-age mortality, and findings related to deprivation inequality are inconsistent. Using 2008 Bolivian Demographic and Health Survey data, this study explores patterns of association between the three factors and mortality occurring in the neonatal and postneonatal periods. Because household-level deprivation might capture some unmeasured characteristics at the community level, such as area-specific investments, this study decomposes household-level deprivation into its between- and within-community components. The results show that after possible confounders are controlled for, community-level absolute deprivation is a significant predictor of neonatal and postneonatal mortality. Relative deprivation and deprivation inequality are not associated with early-age mortality. These findings are specific to a context of widespread deprivation and low inequality within communities; the role of the distribution of deprivation might be more important in countries in which basic needs are met within a bigger proportion of the population. This study helps identify crucial sectors of development related to living standards and deprivation inequality in order to tackle neonatal and postneonatal mortality.

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