Household Economic
Resources
Discussant Comments
UN EXPERT GROUP MEETING
9 September 2008
Garth Bode, Australian Bureau of Statistics
What does the paper from Bulgaria say?
The National Statistical Institute of Bulgaria’s paper (161/6)
for this meeting identifies household economic resources:
o as resources that have a monetary (market) value
o that refer to a person's or family's income, consumption
and wealth (ICW)
o which include goods and services, tangible and intangible
assets, financial assets and liabilities
o which are relevant in the analysis of wellbeing at the
household level
What are income, consumption and
wealth?
Bulgaria’s paper goes on to note:
o
o
o
o
consumption is the use of economic resources
income is the receipt of economic resources
wealth is the ownership of economic resources
finding practical ways of measuring each of these
aspects of economic resources is an on-going
challenge
What's important in ICW analysis?
Bulgaria’s paper points to:
o
o
o
o
revealing the scale, severity and drivers of poverty
identifying the population groups and regions most
affected by economic disadvantage
planning for those most in need of support
designing policies to reduce the risk of poverty (tax
and transfer system)
Why bother with international standards
for ICW?
Bulgaria’s paper also notes:
o income based measures are those most often used
across countries to describe economic wellbeing
o it is therefore essential to have a common conceptual
basis for income measurement and analysis across
countries
o wealth is the ownership of economic resources
o finding practical ways of measuring each of these aspects
of economic resources is an on-going challenge
Aspects of the Bulgarian statistics on
household economic resources
Bulgaria’s data sources:
o
o
o
Household Budget Survey (HBS) annual
EU-SILC
Administrative data - European System of Social
Protection (ESSPROS)
Bulgarian Household Budget Survey
(HBS)
Bulgaria’s HBS objectives:
o
o
o
o
Multipurpose survey
Large number of uses and users
One prime objective of updating weights for CPI
Another objective - calculating the official poverty
line
Bulgarian Household Budget Survey
(HBS) cont'd
Bulgaria’s HBS methods:
o
o
o
o
o
3,000 private households annually, 2-stage cluster
sample
Representative, random, voluntary sample
Household is the social unit of measurement for
collection and analysis
Face-to-face interviews, paper questionnaires,
expenditure diaries
12 divisions of consumption expenditure
EU-SILC
Bulgaria’s EU-SILC involvement:
o 2 pilot waves in 2006 and 2007
o From 2008, EU-SILC in Bulgaria's National Program of
Statistical Surveys
o EU-SILC is a common framework rather than a common
survey
o Variables annually (primary) or 4-yearly or less
(secondary)
o common household and income concepts and
classifications
EU-SILC
Bulgaria’s EU-SILC involvement cont'd:
o EU-SILC variables of primary interest are Laeken
indicators on income, poverty, social exclusion
o Bulgaria still uses HBS data for compiling Laeken
indicators
o Bulgarian EU-SILC sample designed to combine crosssectional and longitudinal requirements
o Four year sample rotation, 75% overlap between waves
o Effective sample of 4,500 households for 2007 data
ESSPROS
Bulgaria’s use of the European System of Social
Protection:
o
o
o
Integrated system of social protection statistics
Provides coherent comparison between European
countries of social benefits (in cash or in kind) and
their financing
Modules on the number of pension beneficiaries and
net social protection benefits
Other sources
Bulgaria has also conducted other studies into
poverty and social exclusion:
o
o
Absolute poverty approaches in 1995, 1997 and
2001
–did not lead to an official poverty line being
established
2003 Multi-Topic Household Survey
–data used to establish official poverty line
Lessons and challenges
Bulgaria learned from technical
support/knowledge transfer in poverty monitoring
Wealth, inequality, poverty among the most
sensitive topics to measure
o
and among the most difficult to measure in an
internationally comparable way
Common frameworks rather than common
surveys important to maximise comparability
Lessons and challenges cont'd
Interest in small area/population groups, but
expensive to directly collect
o
therefore uses small area estimation and exploits
administrative data
New challenges in child poverty, deprivation,
social exclusion, housing etc
Many different approaches
o
o
absolute poverty (consumption based)
relative poverty based on income
Some reflections
Interest in social exclusion and economic
disadvantage is very common
Approaches to data collection are similar
o
household surveys and administrative data sources
both play a role
Common frameworks rather than surveys a good
approach to standardising:
o
allows local differences to be managed in
measurement towards a common concept
Some issues in difference - Australia's
experience
Same strong interest in social exclusion and
economic disadvantage
Approaches to data collection are similar
But, analytic approach is different:
o
o
o
less focus on relative poverty based on income
alone
certainly less focus on poverty cut-offs
and the next two graphs show why
The first graph:
Income distribution for Australia (2003-04 financial
year)
o
o
peaks in the distribution make it sensitive to cut-off
measures at particular points
cut-offs may exaggerate poverty rates, especially
when expressed in terms of a proportion of a
median value
The second graph:
Looks at income distribution outcomes for a
subpopulation for Australia (again 2003-04
financial year)
But this time for 'child poverty'
o
peaks in the distribution make it even more sensitive
to cut-off measures at particular points
Some more reflections:
Common frameworks rather than surveys a good approach
to standardising:
o allows local differences to be managed in measurement
towards a common concept
 Common frameworks in analysis rather than necessarily
common measures?
Suites of measures with relevance focussed upon for
different economies
o poverty gaps may mean more than cut-off head count
measures
A new Canberra Report?
Or an expansion of the 2001 Canberra Report:
o
o
o
o
build on the fundamentals of the conceptual
framework in 2001 report
look more closely at analysis and interpretation of
results (one size doesn't fit all)
extend more fully into expenditure (low consumption
possibilities) measures
incorporate wealth into the analysis
What else?
Exploration of equivalence in international comparisons
o differences between economies, subpopulations and subnational regions
Revisit economic resource distribution within households?
Reconciliation between macro/micro estimates to assess
quality of national accounts
o significant revisions to Australia's household balance
sheet for dwelling values
What more?
More work on social transfers in kind - and fiscal
incidence studies
o
again, integrating macro and micro sources and
methods
Thank you.