Objective Using uniform thresholds and a set of variable threshold levels, this study examined the incidence of catastrophe amongst households of different socio-economic status (SES) quintiles.

Methods A household diary was used to collect illness and household consumption expenditure data from 1128 households over 1 month. Catastrophic health expenditure was examined based on uniform threshold levels of non-food expenditure and a novel set of variable thresholds in which the levels for various SES groups were weighted by the ratio of household expenditure on food.

Results A total of 167 households (14.8%) experienced catastrophe at a non-food expenditure threshold of 40%, with 22.6% and 7.6% of the poorest and richest household quintiles experiencing catastrophe. For the first set of variable scenarios, the thresholds for the poorest and richest household quintiles were 5% and 29.6% and levels of catastrophe were 44.7% and 12.0%, respectively, while the overall level was 36.5%. In the second scenario, the thresholds were 6.8% and 40%, and the levels of catastrophe were 42.5% and 7.6%, respectively, while the overall level was 32.0%.

Conclusions High levels of catastrophic expenditure exist in Nigeria. Use of variable thresholds to measure catastrophe led to higher overall and disaggregated levels of catastrophe. Such a measure is argued to be more appropriate for the examination of catastrophe.