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8 Household collections conducted by the ABS which cover housing for Aboriginal and Torres Strait Islander people are:
9 Care should be taken when comparing data from the different sources due to the different methodologies used in these collections.
CHANGES IN THIS ISSUE
10 Key changes in 2013–14 compared with 2011–12 include:
Changes to the survey sample
11 The expansion in the 2009–10 sample of an extra 4,200 households was maintained in the 2011-12 and 2013–14 SIH. This additional sample of households outside capital cities better supports Council of Australian Governments (COAG) performance indicator reporting, particularly in regard to housing affordability and home ownership measures required under COAG intergovernmental agreements.
12 In 2007–08, the ABS revised its standards for household income statistics following the adoption of new international standards in 2004 and review of aspects of the collection and dissemination of income data. The income estimates from 2007–08 onwards apply the new income standards, and are not directly comparable with estimates for previous cycles. The change in income level in 2007–08 is partly due to the change in standards but also partly due to real change in income. To the extent possible, the estimates for 2003–04 and 2005–06 shown in the time series tables have been revised to reflect the new treatments.
13 For more detail on the nature and impact of the changes on the income data see Appendix 4 of Household Income and Income Distribution, Australia, 2007–08 (cat. no. 6523.0).
CONCEPTS AND DEFINITIONS
14 The key concepts and definitions relating to income statistics are described in the following section of this publication. Other definitions are included in the ‘Glossary’ section of this publication.
15 The household is the basic unit of analysis in this publication. A household consists of one or more persons, at least one of whom is at least 15 years of age, usually resident in the same private dwelling. The persons in a household may or may not be related. They must live wholly within one dwelling. A group of people who make common provision for food and other essentials of living but live in two separate dwellings are in two separate households.
16 The household is adopted as the basic unit of analysis because it is assumed that sharing of the use of goods and services occurs at this level. If smaller units, say persons, are adopted, then it is difficult to know how to attribute to individual household members the use of shared items such as food, accommodation and household goods. Intra-household transfers, however, are excluded. For example, if one member of the household were to pay board to another member of the same household then this is not considered as an increase in the amount of income or housing costs of the household. If such transfers were to be included there would be double counting.
17 An income unit is a single person or a group of related persons within a household, whose command over income is assumed to be shared. Income sharing is assumed to take place within married (registered or defacto) couples, and between parents and their dependent children. The income unit is similar, but not identical, to the unit used in determining the eligibility of people for many government pensions and allowances such as Centrelink payments.
18 Housing costs are the recurrent outlays by household members in providing shelter for themselves. The data collected on housing outlays in the SIH are limited to major outlays on housing, that is, mortgage repayments (principal and interest), rent, property and water rates as well as body corporate fees. Housing costs are shown in this publication as weekly equivalents.
19 Only payments which relate to the dwelling occupied by the household at time of interview, that is, a respondent's usual place of residence, are included. Housing costs only include mortgage/loan repayments if the purpose of the loan at the time it was initially taken out was primarily to buy, build, add to or alter the occupied dwelling.
20 There are a number of limitations to the housing costs information presented in this publication due to practical data collection considerations. These limitations should be borne in mind when comparing the housing costs of different tenure and landlord types, that is when comparing the costs of owner occupiers with the costs of renting households, and when comparing the costs of households renting from state and territory housing authorities with the costs of other renters.
21 Household income consists of all current receipts, whether monetary or in kind, that are received by the household or by individual members of the household, and which are available for, or intended to support, current consumption.
22 Income includes receipts from:
23 Gross income is the sum of income from all sources before income tax and the Medicare levy have been deducted. Prior to 2005–06, Family Tax Benefit paid by Centrelink through the tax system or as a lump sum was excluded from gross income for practical reasons but deducted in deriving disposable income. Since 2005–06 these payments have been included in gross income.
24 Disposable income better represents the economic resources available to meet the needs of households. It is derived by deducting estimates of personal income tax and the Medicare levy from gross income. The Medicare levy surcharge was calculated and deducted from gross income while calculating disposable income (as it was for the first time in 2007–08).
25 Income tax is estimated for all households using taxation criteria for 2013–14 and the income and other characteristics of household members reported in the survey.
26 Prior to 2005–06 the derivation of disposable income also included Family Tax Benefit paid by Centrelink through the tax system or as a lump sum but for practical reasons, it was not included in the gross income estimates. Since 2005-06, it has been included in the derivation of both Disposable and Gross income.
Equivalised disposable income
27 Equivalised disposable household income is calculated by adjusting disposable income by the application of an equivalence scale. The scale is based on the principle that larger households require a higher level of income to achieve the same standard of living as a smaller household. However, there are economies of scale, so each additional person does not equally add to the income needed to support household consumption.
28 Disposable income can include negative values, these are adjusted to zero for the purpose of equivalised disposable household income.
29 Most analyses in this publication use equivalised disposable household income rather than gross or disposable income. Using an equivalising factor for household income enables the direct comparison of the relative economic wellbeing of households of different size and composition.
30 After household income is adjusted according to an equivalence scale, the equivalised income can be viewed as an indicator of the economic resources available to a standardised household. For a lone person household, it is equal to income received. For a household comprising more than one person, equivalised income is an indicator of the household income that would be required by a lone person household in order to enjoy the same level of economic wellbeing as the household in question.
31 For more information on equivalised income, see the User Guide.
Lowest income decile
32 Throughout the next few paragraphs, the terms quintile, decile and percentile are used. If a distribution, such as household income, is put in order from lowest to highest, and then divided into 100 equal groups, each group is a percentile. Ten percentiles make up a decile (ten equal groups) and twenty percentiles make up a quintile.
33 Equivalised income generally provides a useful indicator of economic wellbeing. However, some households report extremely low and even negative income in the survey, which places them well below the safety net of income support provided by government pensions and allowances. Households may under report their incomes in the survey at all income levels, including low income households. Households may also correctly report low levels of income if they have incurred losses in their unincorporated business or have negative returns from other investments.
34 Studies of income and expenditure reported in the HES have shown that such households in the bottom income decile and with negative gross incomes tend to have expenditure levels that are comparable to those of households with higher income levels (and slightly above the average expenditures recorded for the fifth income decile). This suggests that these households have access to economic resources such as wealth, or that the instance of low or negative income is temporary, perhaps reflecting business or investment start up.
35 Other households in the lowest income decile in past surveys:
However, on average, these households also had expenditures above the average of the households in the second income decile, which may be because these households are using assets to maintain a higher standard of living than their income alone could allow.
36 Some of the households included in the lowest income decile are unlikely to be suffering extremely low levels of economic wellbeing. Income distribution analysis may lead to inappropriate conclusions if such households are used as the basis for assessing low levels of economic wellbeing.
37 More recent analysis suggests that this approach may have over-estimated the economic wellbeing of low income households, and unnecessarily excluded some of the most vulnerable households in the lowest income decile. To enable analysis of various tenure groups in the Housing Occupancy and Costs publication, a lower income group is formed comprising the 38% of people with equivalised disposable household income between the 3rd and 40th percentile. This group is referred to as Lower Income Households.
HOUSING COSTS AND HOUSEHOLD INCOME
38 Housing costs are often a major component of total living costs. Therefore housing costs are often analysed as a proportion of total income, sometimes referred to as a housing affordability ratio. However, comparisons between these measures are subject to the limitations of housing cost estimates obtained in the SIH as described in the 'Housing Costs' section of these 'Explanatory Notes'. Housing affordability ratios derived from SIH data are further impacted by the inclusion of CRA in the value of income collected. CRA is estimated, on average, to represent about 5% of the reported income of households receiving CRA, in 2013-14 SIH.
39 To illustrate the difficulties discussed above, consider two couples that are renting their dwellings. Both receive government pensions of $400 per week. One rents from a public housing authority and pays rent of $100 per week. The other pays $135 rent per week to a private landlord and receives CRA of $35 per week. In SIH, the housing costs of the latter household would be recorded as $135 and their income would be recorded as $435. The couple renting from the public housing authority has a housing costs/income ratio of 25%. The housing costs/income ratio for the latter household would be derived as 31%. However, if CRA receipts are excluded from both housing costs and income the housing costs/income affordability ratio for the latter couple is also 25%, highlighting that there is no substantive difference between the housing costs or income situation of the two couples. The treatment of CRA is of particular importance when considering changes in housing affordability ratios over time, since there has been a shift from providing public housing to providing CRA as a means of supplying affordable housing to low income households.
40 While housing costs can be a major component of total living costs, the difference between the housing costs of a larger household and a smaller household would not be expected to be as great as the difference in many other costs, such as food or clothing. In other words, larger households can be expected to benefit from economies of scale in the supply of housing. This means that if a larger household and smaller household both have the same standard of living, it could be expected that on average the larger household will have a lower housing costs/income ratio. Therefore, relatively high housing costs/income ratios are of greater concern with respect to larger households than smaller households. This should be kept in mind when comparing such ratios across different household sizes.
41 In comparing households' housing costs with their income, it should be noted that households have a variety of housing preferences. Some people may choose to live in an area with high property values because it is close to their place of employment and therefore they have lower transport costs. Some people choose to incur relatively high housing costs because they prefer a relatively high standard of housing compared with other consumption possibilities. High mortgage repayments might reflect a choice to purchase a relatively expensive home, or pay off a mortgage relatively rapidly, as a form of savings.
42 In this issue, households with nil or negative income have been excluded from calculations of housing costs as a proportion of gross income. In the 2013-14 SIH, these households made up 0.5% of all households.
43 Some households reported extremely low income in the survey, which placed them well below the safety net of income support by government pensions and allowances. As explained in the 'Lowest income decile' section of these 'Explanatory Notes', the incomes of these people are not always an appropriate indicator of the economic resources available to them. These households are likely to have high housing costs/income ratios.
44 Households with relatively low income (e.g. lower income households) and housing costs greater than a certain proportion of income, often 30%, are sometimes said to be in "housing stress". However, such measures should be interpreted with care because of the lack of comparability of the ratios across tenure and landlord types and the difficulties of comparing across different household sizes, as described in the previous paragraphs.
45 The concept of housing utilisation in this publication is based upon a comparison of the number of bedrooms in a dwelling with a series of household demographics such as the number of usual residents, their relationship to one another, age and sex. There is no single standard or measure for housing utilisation. However, measures based on the Canadian National Occupancy Standard are presented in this publication.
46 The Canadian National Occupancy Standard is sensitive to both household size and composition in determining housing requirements. The measure assesses the bedroom requirements of a household by specifying that:
47 Households living in dwellings where this standard cannot be met are considered to be overcrowded. The CNOS can also be used to derive an estimate of spare bedrooms based on household composition and number of bedrooms.
TENURE TYPE AND LANDLORD TYPE
48 The concept of housing tenure is based on the type of legal right of the occupant/s to occupy the dwelling. Tenure is determined according to whether the unit (household, income unit or person) owns the dwelling outright, owns the dwelling but has a mortgage or loan secured against it, is paying rent to live in the dwelling or has some other arrangement to occupy the dwelling.
49 In this publication, tenure information is provided at the household level. Person level and income unit level tenure were also enumerated in the 2013-14 SIH and are available on the confidentialised unit record file (CURF). Tenure information at household, income unit and person levels enables users to analyse within household tenure arrangements, such as subletting and boarding.
50 Owners are divided into two categories - owners with mortgages and owners without mortgages. A household's tenure type is owner with a mortgage if there is any outstanding mortgage or loan secured against the dwelling. This mortgage or loan may have been initially obtained primarily for either the purchase or the building of the dwelling, or for undertaking alterations or additions, or for some other purpose such as the purchase of a vehicle or an investment property. However, mortgage payments where the initial purpose of the loan was not primarily for housing are not treated as housing costs. A household's tenure type is owner without a mortgage if there are no loans or mortgages secured against the dwelling.
51 Renters are occupants who pay money as rent to another person or organisation, referred to as the landlord, in return for being allowed to occupy the dwelling. Renters can be further classified according to type of landlord. The landlord may be a relative or an unrelated person in another dwelling, or can be a real estate agency, a state or territory housing authority, a community organisation, a trust, or an employer.
52 The survey collects information by personal interview from usual residents of private dwellings in urban and rural areas of Australia (excluding very remote areas), covering about 97% of the people living in Australia. Private dwellings are houses, flats, apartments, caravans, garages, tents and other structures that were used as places of residence at the time of interview. Long-stay caravan parks are also included. These are distinct from non-private dwellings which include hotels, boarding schools, boarding houses and institutions. Residents of non-private dwellings are excluded.
53 Usual residents excludes:
54 Information for each household was collected using:
55 Sample copies of the above documents are included in the Survey of Income and Housing, User Guide, Australia, 2013–14 (cat. no. 6553.0).
56 The sample was designed to produce reliable estimates for broad aggregates for households resident in private dwellings aggregated for Australia, for each state and for the capital cities in each state and territory. More detailed estimates should be used with caution, especially for Tasmania, the Northern Territory and the Australian Capital Territory.
57 For the 2013–14 SIH, dwellings were selected through a stratified, multistage cluster design from the private dwelling framework of the ABS Population Survey Master Sample. Selections were distributed across a twelve month enumeration period so that the survey results are representative of income patterns across the year.
58 Of the selected dwellings there were 18,249 households in the scope of the survey. Of these, 20% did not respond at all to the questionnaire, or did not respond adequately. Most of these were not able to be contacted during the survey enumeration or were contacted but either refused to respond or were not able to respond. The remainder of these households included:
Partial response and imputation
59 Some households did not supply all the required information but supplied sufficient information to be retained in the sample. Such partial response occurs when:
60 If there is sufficient response to retain the household, then the missing data are imputed by replacing each missing value with a value reported by another person (referred to as the donor).
61 Donor records are selected by finding fully responding persons with matching information on various characteristics (such as state, sex, age, labour force status and income) as the person with missing information. As far as possible, the imputed information is an appropriate proxy for the information that is missing. Depending on which values are to be imputed, donors are randomly chosen from the pool of individual records with complete information for the block of questions where the missing information occurs.
62 The final SIH sample includes 5,613 households which had at least one imputed value in income, assets and liabilities, or child care expenses. For 40% of these households only a single module was missing data.
63 The final sample on which estimates were based is composed of persons for which all necessary information is available. The information may have been wholly provided at the interview (fully-responding) or may have been completed through imputation for partially responding households. Of the selected dwellings, there were 18,249 in the scope of the survey, of which 14,162 (78%) were included as part of the final estimates.
65 Weighting is the process of adjusting results from a sample survey to infer results for the total in scope population whether that be persons or households. To do this, a 'weight' is allocated to each sample unit (e.g. a person or a household). The weight is a value which indicates how many population units are represented by the sample unit. The first step in calculating weights for each unit is to assign an initial weight, which is the inverse of the probability of being selected in the survey. For example, if the probability of a household being selected in the survey was 1 in 600, then the household would have an initial weight of 600 (that is, it represents 600 households).
66 An adjustment is then made to the initial weights to ensure that seasonal variation is appropriately represented in survey estimates. After this initial adjustment, the sum of the weights of households in each quarter is in proportion to the length of the quarter (which aligns across the financial year with pension indexation dates rather than calendar quarters).
67 The initial weights are then calibrated to align with independent estimates of the population of interest, referred to as 'benchmarks'. Weights calibrated against population benchmarks ensure that the survey estimates conform to the independently estimated distribution of the population rather than to the distribution within the sample itself.
68 Most of the independent person and household benchmarks are based on demography estimates of numbers of persons and households in Australia. The benchmarks are adjusted to include persons and households residing in private dwellings only and to exclude persons living in very remote areas, and therefore do not, and are not intended to, match estimates of the Australian resident population published in other ABS publications. The demography estimates of persons (estimated resident population - ERP) and households used in 2013–14 SIH are based on the 2011 Census.
69 In the 2013–14 SIH, as in 2007–08, 2009–10 and 2011–12, all persons in each household were assigned a weight. This differs from the 2005–06 SIH where children aged 0-14 years were not given separate weights, but household counts of the number of children were benchmarked to population totals.
70 The benchmarks used in the calibration of the final weights for the 2013–14 SIH were:
71 Estimates produced from the survey are usually in the form of averages (e.g. average weekly income of couple households with dependent children), or counts (e.g. total number of households that own their dwelling or total number of persons living in households that own their own dwelling). For counts of households, the estimate was obtained by summing the weights for the responding households in the required group (e.g. those owning their own dwelling). For counts of persons, the household weights were multiplied by the number of persons in the household before summing. The SIH collects data on the number of people, including children, in each household but separate records with income and most detailed data were only collected for people 15 years and older.
RELIABILITY OF ESTIMATES
72 The estimates provided in this publication are subject to two types of error, non-sampling and sampling error.
73 Non-sampling error can occur in any collection, whether the estimates are derived from a sample or from a complete collection such as a census. Sources of non-sampling error include non–response, errors in reporting by respondents or recording of answers by interviewers and errors in coding and processing the data.
74 Non-sampling errors are difficult to quantify in any collection. However, every effort is made to reduce non-sampling error to a minimum by careful design and testing of the questionnaire, training of interviewers and data entry staff and editing and quality control procedures during data processing.
75 One of the main sources of non-sampling error is non-response by persons selected in the survey. Non-response occurs when people cannot or will not cooperate or cannot be contacted. Non-response can affect the reliability of results and can introduce a bias. The magnitude of any bias depends upon the level of non-response and the extent of the difference between the characteristics of those people who responded to the survey and those who did not.
76 The following methods were adopted to reduce the level and impact of non-response:
77 The estimates are based on a sample of possible observations and are subject to sampling variability. The estimates may therefore differ from the figures that would have been produced if information had been collected for all households. A measure of the sampling error for a given estimate is provided by the standard error, which may be expressed as a percentage of the estimate (relative standard error). Further information on sampling error is given in the User Guide.
78 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.
SPECIAL DATA SERVICES
79 The ABS offers specialist consultancy services to assist clients with more complex statistical information needs. Clients may wish to have the unit record data analysed according to their own needs, or require tailored tables incorporating data items and populations as requested by them. Tables and other analytical outputs can be made available electronically or in printed form. However, as the level of detail or disaggregation increases with detailed requests, the number of contributors to data cells decreases. This may result in some requested information not being able to be released due to confidentiality or sampling variability constraints. All specialist consultancy services attract a service charge, and clients will be provided with a quote before information is supplied.
UNIT RECORD FILE
81 A basic confidentialised unit record file (CURF) from the 2013–14 SIH will be released on CD-ROM in late 2015. A more detailed (expanded) SIH CURF will also be available through the ABS Remote Access Data Laboratory. All clients wishing to access the SIH 2013–14 basic and expanded CURFs should refer to the How to Apply for Microdata web page. Clients should familiarise themselves with the User Manual: Responsible Use of ABS CURFs and other related microdata information which are available via the Microdata web pages, before applying for access through MiCRO.
82 The ABS/Universities Australia Agreement provides participating universities with access to a range of ABS products and services. This includes access to CURF data. For further information, university clients should refer to the ABS/Universities Australia Agreement web page.
83 The Microdata Entry page on the ABS website contains links to microdata related information to assist users to understand and access microdata. For further information users should contact the microdata access team by email: email@example.com or telephone (02) 6252 7714.
84 The Survey of Income and Housing, User Guide, Australia, 2013–14 (cat. no. 6553.0) includes information about the purpose of the survey, the concepts and contents, and the methods and procedures used to collect the data and derive the estimates. It also outlines the differences between the 2013–14 survey and earlier SIH surveys. Its purpose is to help users of the data understand the nature of the survey, and its potential to meet user needs. It also contains information for users of the SIH confidentialised unit record files (CURFs).
85 Refer to the ‘Related Information’ tab of this publication for other ABS publications which may be of interest.
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