Australian Bureau of Statistics
3125.0 - Demography Working Paper 2001/3 - Improving Household Estimates, 2001
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 06/06/2001
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FIGURE 1 : ESTIMATED RESIDENT HOUSEHOLDS - Australia, as at 30 June
3. The impact of the new method is clearly noticeable at the national level, and is more pronounced at the sub-national level, as illustrated by the data from the Northern Territory.
FIGURE 2 : ESTIMATED RESIDENT HOUSEHOLDS - Northern Territory, as at 30 June
4. The second key criticism of the previous method of producing household estimates was that the annual estimates were volatile, particularly for sub-national estimates and for estimates by household composition. The reason for this variability in the data is that the propensity to live in a particular household composition within a certain area is measured by the Labour Force Survey, and as such is subject to sampling error. This is particularly the case when we are considering small cells, such as household composition in Hobart, for example. The improved method of household estimation tries to reduce this sampling error by two mechanisms; firstly, the household composition propensities are applied at a broader level than they were under the previous method, and secondly, the period-to-period variability is reduced through application of a smoothing filter.
FIGURE 3 : ESTIMATED RESIDENT HOUSEHOLDS - Hobart, as at 30 June
FIGURE 4 : ESTIMATED RESIDENT HOUSEHOLDS - Adelaide, as at 30 June
FIGURE 5 : ESTIMATED RESIDENT HOUSEHOLDS - Balance of Victoria, as at 30 June
Changes to the Household Estimation Method
5. There were three changes implemented to improve the method used to estimate the number of usually resident households within Australia. The underlying propensity method, used before the modifications detailed here, is described in Household Estimates, 1986, 1991-94 (Cat. No. 3229.0).
6. Firstly, the level of aggregation used before undertaking propensity calculations was increased. This meant that the cells used for estimation from the Labour Force Survey were broader than under the previous method. Specifically, the previous method applied a household composition propensity to ERP with the finest level of disaggregation being "four or more persons aged 15 or more living with three or more persons aged 0 to 14". For many geographic areas (eg, Northern Territory, Tasmania) the sample from the Labour Force Survey was especially small, meaning that the resulting household estimate was volatile. The new method now being employed has "three or more persons aged 15 or more living with two or more persons aged 0 to 14" as the finest level of disaggregation.
7. This improvement substantially reduced the variability of the data, but the resulting series was still considered too volatile. Specifically, whilst there were far fewer large changes in quarterly estimates, the changes that remained were still not reasonably explained by changes in ERP; there is an implicit assumption here that living arrangement propensities do not change substantially from quarter to quarter for a large geographic region. The changes in the data that were being observed were still felt to be being driven by the sampling error from the Labour Force Survey, since with collapsing of living arrangement/household size groupings the sample sizes from Labour Force Survey were still quite small. In response to this observed variability a filter function was introduced in an attempt to smooth out the quarterly volatility, whilst still allowing ongoing trends to be measured. After several filter functions were trialled, a 13 term Henderson filter was adopted as a filter applied to estimates at the quarterly level.
8. After implementing these changes it was still found that the household estimates using the propensity method differed from census estimates (estimates for 30 June in census years based on the census in that year, as opposed to estimates based on the previous census). To account for this difference, a weighted average of the census estimate and the quarterly estimate is produced, with the weights being a function of the time since the previous census.
9. For example, for data after the 1996 Census (and whilst there is no data yet from the 2001 Census) the quarterly estimate of usually resident households is as follows:
Let, SM96=smoothed household estimate for 30 June 1996
SMHHq=quarterly smoothed household estimate post 1996
10. This method is applied to all quarters after June 1996 for each geographic and household composition combination.
11. For estimates in the 1991-1996 intercensal period, a combination of 1991 and 1996 adjustments were applied to quarters between the two censuses for each geographic and household composition combination as follows:
Let, SM91=smoothed household estimate for 30 June 1991
SMHHq=quarterly smoothed household estimate 1991-1996,
then, for example for September 1991, one quarter after the 1991 Census and 19 quarters before the 1996 Census:
Details of the previous household estimates and the estimates resulting from the improved method are presented in the following table.
Results of the improved method
TABLE 1 : PREVIOUS METHOD AND IMPROVED METHOD HOUSEHOLD ESTIMATES by Part of State , as at 30 June
Outcomes of the improvement process
12. There are several noteworthy outcomes of the improvement process. Firstly, the "kink" that occurs after intercensal revision of both ERP and household estimates was removed, so that the annual series of data are smoother. Secondly, the annual variation in household estimates has been reduced, and the remaining changes are more readily explainable by observed changes in the household population. This drop in variability is particularly relevant for sub-national estimates or estimates of households by household composition.
13. However, as well as the improvements noted above, there are other findings of importance. In particular, the smoothing technique used means that the series, and particularly then end point of the series, is subject to revision in future releases. Secondly, the changes introduced so far are primarily an attempt to reduce the impact of using the monthly Labour Force Survey as a source for household composition propensities. This improvement process has demonstrated that the household estimate data is limited by the Labour Force Survey data, and is subject to the same restrictions regarding sampling error and disaggregation as employment statistics from that source. Estimates for Darwin are still highly volatile, despite the changes introduced and are therefore not available as standard ABS output.
Differences from other ABS Household estimates
14. The improved estimates to be published in the Australian Demographic Statistics, December Quarter 2000 (Cat. No. 3101.0) differ from estimates published in other ABS publications. In particular, the censal year (1996) estimates presented here differ from the censal year (1996) estimates presented in Household and Family Projections, 1996 to 2021 (Cat. No. 3236.0). This difference arises because of the difference in the methods employed. In determining the population base used for the projections data, household estimates were determined from living arrangement propensities, which then gave family propensities, and finally household propensities. Since the focus was initially on living arrangement type, there is an issue of classification of people away from the dwelling on Census night. For the improved household estimates presented here, this classification issue does not arise. Unlike living arrangement, household composition can be readily determined through the use of the "absent persons" question (Q 41) in the 1996 Census of Population and Housing. The estimates presented in Australian Demographic Statistics (Cat. No. 3101.0) are considered more accurate for 30 June 1996.
15. Estimates of the number of households are also sometimes presented in the results of ABS household surveys. These will differ slightly from the estimates presented in Australian Demographic Statistics (Cat. No. 3101.0). In some cases there is a difference because the scope of the survey differs from the usually resident household concept. In other cases the estimates will differ from those presented here because the information used in survey estimation (the "benchmark") is a short term projection, rather than an estimate as presented here. The family estimates and estimates of household population produced annually from the monthly Labour Force Survey, as presented in Labour Force Status and Other Characteristics of Families, Australia (Cat. No. 6224.0), use a different method from that presented here and as a consequence the improved estimates presented here again differ slightly. In all cases, the improved estimates presented in Australian Demographic Statistics (Cat. No. 3101.0) are considered more accurate estimates of both the number of households and the household population in Australia.
16. The improved series of household estimates will be released in Australian Demographic Statistics, December 2000 (Cat. No. 3101.0), published on 7 June 2001. Data for Australia by household composition is presented in Table 24 and household totals by Part of State is presented in Table 25. The latter is also available electronically in AusStats spreadsheets, or via ABS@.
17. Quarterly estimates of all combinations of household composition by geographic area are available on request by contacting email@example.com. More information on household estimates can be obtained by contacting firstname.lastname@example.org or email@example.com
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This page last updated 8 December 2006