Giving more prominence to
households
AEG
New York, 23 -25 April 2012
1
Introduction

Stiglitz-Sen-Fitoussi report (five recommendations
on households)
– When evaluating material well-being, look at income and
consumptions rather than production
– Emphasize the household perspective
– Consider income and consumption jointly with wealth
– Give more prominence to the distribution of income,
consumption and wealth
– Broaden income measures to non-market activities
2
Plans and initiatives

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Giving more prominence to the publication of
household data
Distribution of income, consumption and wealth
Understanding the drivers of differences between
changes in GDP and changes in household
disposable income
Measuring household services produced for own
final use
3
Giving more prominence to the
publication of household data
4
Publication of household data



Focus usually on GDP-growth
Household (adjusted) disposable income may
provide a better reflection of material well-being
Possible enhancements:
– Timely compilation of quarterly and annual sector
accounts on households
– Put more emphasis on households when publishing NAdata => timely press release

Possible issues:
– Combined sector Households and NPISHs
– Definition of disposable income?
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Distribution of income, consumption
and wealth
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Early 2011 - Two Expert Groups on households
economic resources were established following
the Stiglitz-Sen-Fitoussi recommendations
OECD Expert Group on Micro Statistics on Income, Consumption and
Wealth (EG ICW), aiming at:

– Pursuing methodological work to develop standards and guidelines for
measuring household wealth
– Proposing a framework for joint analysis of micro data on households
income, consumption and wealth
OECD-Eurostat Expert Group on Disparities in a National Accounts
Framework (EG DNA), aiming at:

– Using existing micro sources to produce indicators of disparities by
group of households consistent with SNA totals – feasibility study
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EG ICW

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Membership:
17 NSOs, UNECE, Eurostat,
ECB, LIS, country experts, OECD
(secretariat)
Chair:
Mr Bob McColl (AUS)
Financial/In-Kind support:
AUS, CH, IT
2 meetings:
March and December 2011
EG DNA

Membership:
25 NSOs, ECB, LIS, OECD and
Eurostat (both secretariat)

Chair:
Mr Wim Van Nunspeet (NL)
Financial/In-Kind support:
FR
2 meetings:
March and December 2011

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Goal of EG DNA

EG DNA practical aim: breakdown of household income and
final consumption according to NA by household group
Household type
Totals, in National Currency
Total
resident
HH
HH
HH
HH
HH
group_1 group_2 group_3 group_4 group_5 population
Wages and salaries
….
Social benefits received
NA
totals
….
Current taxes paid
….
….
Adjusted disposable income (B7)
Food
Housing
Health
….
….
….
Final Actual consumption (P4)
Saving (B8=B7-P4)
Saving ratio (=B8/B7)
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Goal of EG DNA (cont.)

Produce distributional information consistent
with macro-totals
– Average household (adjusted) disposable
income, final consumption and saving by HH
group
– Stucture of households disposable income by HH
group
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Goal of EG DNA (cont.)
Household groups to be dinstinguished
 Household composition and age of each
adult
–
–
–
–
–
–
–

Single, > 65 years, without children
Single, < 65 years, without children
Single, with children
Two adults, < 65 years, without children
Two adults, one adult . 65 years, without children
Two adults, with children
Other
Equivalised income quintiles
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Goal of EG DNA (cont.)
Household groups to be dinstinguished
 Main source of income
– Owners of unincorporated enterprises with paid
employees
– Owners of unincorporated enterprises without
paid employees
– Employees
– Pensioners
– Recipient of transfer income (other than
pensions) and property income
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Main issues
Gaps between micro and macro measures:
 Differences in scope:
– Macro: half EG DNA countries include NPISHs
– Micro: most micro sources exclude collective households

Differences in definition of income:
–
–
–
–

Imputed rents owner-occupied dwellings
Social transfers in kind
Property income attributed to insurance policy holders
Fisim
Measurement issues:
– Adjustment for underground economy
– Interest and dividends received
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Progress and future work
EG DNA: a work in two main steps

Step 1: Taking stock of information on household income,
consumption and wealth; description and comparison of micro
and macro sources
From March to December 2011

Step 2:
• Breakdown of households according to an agreed
methodology
• Proposal for new indicators on income, consumption and
saving disparities
From November 2011 to December 2012
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Progress and future work (cont.)
End February: agreement on common template for step 2
1-3 August (Boston): third EG DNA meeting
Discussion of the first national results according to common template
5-11 August (Boston): IARIW conference
Paper on micro-macro comparisons
End of 2012: final report of the Expert Group
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Understanding the drivers of
differences between changes in GDP
and changes in household
disposable income
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From GDP to HH disposable income
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Periods of consistent diverging developments
Research project into the analysis of main drivers:
(re)distribution of income between domestic
sectors: labour/capital shares, the size of the
government, role of rents and corporate profits, etc.
Both in current prices and constant prices
First result: conceptual paper on the framework (to
be discussed at the AEG)
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Measuring household services
produced for own final use
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Household services produced for
own final use


Services produced by households for own final use
excluded from the SNA (except dwelling services),
although they share many of the characteristics of
the same kind of market services
Main problems:
– Valuation in combination with the sheer size of the relevant
services (replacement cost versus opportunity cost)
– Delineation of the relevant services
– Collection of underlying data

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Issues in relation to (material) well-being and
international comparability
Consensus: Keep on excluding them from the core
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set of national accounts
Issues for discussion

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Main (general) recommendations of the AEG on
the presentation/publication of household data?
Main recommendations of the AEG related to the
compilation of distributional information?
How does the AEG look upon the initiative to
analyze differences in changes of GDP and
changes of HH disposable income?
What is the advice of the AEG in relation to nonmarket services of households?
Does the AEG have other suggestions?
International alignment and communication?
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