6549.0 - Household Income, Consumption, Saving and Wealth, A Provisional Framework, 1995
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 06/06/1995
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Contents >> Chapter 7. Statistical units

Overview

7.1. A statistical unit (or counting unit) is the basic entity for which information is to be collected and analysed. The following statistical units are relevant for measures of economic well-being of the population:

• Person
• Household
• Family
• Income unit.

7.2. The following topics are definitions of these units. The ABS Classifications and Standards Section can provide more detail about the definitions and describe how the definitions are operationalised.

Person

Definition

7.3. The statistical unit person comprises all people in their capacity as 'private' individuals. A person may be classified in a number of different ways - e.g. employee, pensioner. These different classifications will often specify the types of people to be included. Thus, for 'employee', only people 15 years of age and over are included if they have a job. For 'age pensioner', only males 65 years and over and females 60 years and over who are in receipt of government cash benefits are included.

7.4. The statistical unit also includes persons as owners of, or partners in, unincorporated enterprises. Ideally, one would wish to separate out the income, consumption and net worth of the persons as members of a family or household and the income, consumption and net worth of the businesses they operate. In practice, it is often not possible to distinguish between the assets and liabilities of an unincorporated enterprise and those of the owner in his/her private capacity.

7.5. Liabilities of unincorporated enterprises and owners are not separable. Legally, the owner and the enterprise constitute the same entity and owners are responsible for all debts of the business. This means that a large business debt incurred during the reference period is also a debt incurred by the owner and should therefore feature in any calculation of that private person's change in net worth.

7.6. Many fixed assets such as buildings and cars are used for both private and business purposes and it may be difficult even for the owner to make this clear distinction. In addition, some goods supposedly purchased for intermediate consumption in the business are used as final consumption by the person or household.

Household

Definition

7.7. A household is broadly defined as a group of people who usually reside and eat together.

7.8. Operationally, it is defined as either:

• a one-person household, that is, a person who makes provision for his or her own food or other essentials for living without combining with any other person to form part of a multi-person household; or
• a multi-person household, that is, a group of two or more persons, living within the same dwelling, who make common provision for food or other essentials for living. The persons in the group may pool their incomes and have a common budget to a greater or lesser extent; they may be related or unrelated persons, or a combination of both. (ABS 1994a.)

7.9. Households therefore have the following characteristics:
• a household resides wholly within one physical dwelling. A group of people who make common provision for food but are living in two separate dwellings are two separate households;
• the notion of pooling income may be implied by the definition but it is not an essential criterion in defining a household. That criterion is used in defining the income unit (see below);
• lodgers, who receive accommodation only (not meals), are treated as a separate household;
• boarders, who receive accommodation and meals (board), are treated as part of the household.

Family

Definition

7.10. A family is defined as: two or more related people who usually live together.

7.11. A family comprises two or more persons, one of whom is at least 15 years of age, who are related by blood, marriage (registered or de facto), adoption, step or fostering, and who are usually resident in the same household. A separate family is formed for each married couple, or for each set of parent/child relationships where only one parent is present.

7.12. Families therefore have the following characteristics:

• a family must consist of at least two persons, one of whom is at least 15 years of age;
• a family is identified only from persons who are usually resident within a specific household. Family members living in other households are excluded from being part of the same family for practical collection purposes;
• registered and de facto (including same sex ) marriages are accorded equal status;
• unrelated individuals living in the same household (e.g. friend, boarder, housekeeper) are not counted as family members provided they are 15 years of age or over;
• separate families are identified within a single household if more than one group of people satisfy the criteria for forming a family.

Income unit

Definition

7.13. An income unit is defined as: one person, or a group of related persons, within a household, whose command over income is shared.

7.14. The relationships allowed for in the definition of income unit are restricted to those of marriage (registered or de facto) and of parent/dependant child who usually reside in the same household.

7.15. Operationally, this means that an income unit can be defined as:

• (a married couple (registered or de facto) or sole parent, and dependent children only; or
• married couple only (registered or de facto) with no dependent children present; or
• a person in a private dwelling who is not related to any other household member either by marriage (registered or de facto) or by the parent/dependant child relationship.

7.16. The ideal statistical unit for analyses of economic well-being is one where assumptions of sharing of economic resources are most sustainable. Ideally, the unit should be one where an assumption can be made that the well-being of any individual can be assessed on the basis of the combined economic resources of all members.

7.17. In this regard, households and families suffer from the fact that the amount of sharing of resources within these units is extremely variable. The household is used as a default unit in the ICW framework, however, because of the need to aggregate to this level when dealing with data on consumption and assets. Where income data only is available, this latter constriction is removed.

7.18. While there has been little work done in Australia on the way different household and family members share income, the ABS makes the fairly safe assumption that, in the Australian context, the closer the relationship between the members, the more likely it is that income will be shared. Therefore, where income is used as a proxy for economic well-being, the preferred unit of analyses is the income unit.

7.19. Note that sharing of income in this context means that members of the unit benefit equally from the income. This does not mean that the same amount of money must be spent on each member. Obviously, the needs of each member of the unit will differ according to characteristics such as age, student status, labour force status, etc. Different needs of members may be taken into account by use of equivalent scales during income analysis.

7.20. It should be noted, however, that the assumptions of sharing inherent in the statistical unit will not apply in all cases. The extent of income sharing within income units may vary considerably and, therefore, measures of the unit's economic well-being will serve only as proxies of individual economic well-being.

Examples of households

Multiple unit household (Figure 7.1)

7.21. A household comprising a wife, husband, their employed daughter, her friend (boarder), another daughter aged 20 and studying full-time (student), husband's mother (grandmother) and father (grandfather) would be categorised into family and income units as shown in figure 7.1:

Single unit household (Figure 7.2)

7.22. A household comprising a mother and 12 year old son would be categorised into family and income units as shown in figure 7.2.

Relationship between units

7.23. In summary, the hierarchical relationship between a household, family, and income unit is characterised by the following:

• household - common provision for food or other essentials for living
• family - related by blood, marriage, adoption, step or fostering
• income unit - a pooled or shared command over economic resources.

7.24. A household may contain one or more family units, each of which may contain one or more income units (see Figure 7.1). Frequently the household, family and income unit are identical (see Figure 7.2).

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