2901.0 - Census of Population and Housing: Census Dictionary, 2016  
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2016 Census Dictionary >> Glossary >> Equivalised Total Household Income (weekly) (HIED)

Equivalised Total Household Income (weekly) (HIED)

Equivalised total household income is household income adjusted by the application of an equivalence scale to facilitate comparison of income levels between households of differing size and composition, reflecting that a larger household would normally need more income than a smaller household to achieve the same standard of living.

Equivalised total household income is derived by calculating an equivalence factor according to the 'modified OECD' equivalence scale, and then dividing income by the factor. The equivalence factor is built up by allocating points to each person in a household (1 point to the first adult, 0.5 points to each additional person who is 15 years and over, and 0.3 to each child under the age of 15) and then summing the equivalence points of all household members.

Equivalised total household 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 household income. For a household comprising more than one person, it is an indicator of the household income that would be needed by a lone person household to enjoy the same level of economic wellbeing.

Alternatively, equivalised total household income can also be viewed as an indicator of the economic resources available to each individual in a household. Mean equivalised household income is therefore calculated by adding the equivalised total household income of all households, and then dividing by the number of persons. This enables people in large households to have the same contribution to the mean as people living alone.

Equivalised total household income is set to zero when total household income is negative, such as when losses incurred in a household's unincorporated business or other investments are greater than any positive income from any other sources.

Total family income is not equivalised. All people in a household benefit from the economies of scale for housing and other shared costs, regardless of whether they are in the same family or not. Therefore the most appropriate indicator of the standard of living of a family is still the equivalised income of the household in which they live.

A more detailed explanation is provided in
Survey of Income and Housing, User Guide, Australia (cat. no. 6553.0).

For the dwelling variable Equivalised Total Household Income (weekly)
(HIED), where children under 15 years were absent from the household on Census night, they were included in the calculation. Visitors and people in 'Not applicable' categories were excluded from the calculation. HIED is not calculated for households that comprise only visitors.

See also Household, Household Income Derivation Indicator (HIDD), Median income, Total Household Income (weekly) (HIND), Total Personal Income (weekly) (INCP).

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