A conceptual framework
1.1. A Provisional Framework for Household Income, Consumption, Saving and Wealth (ICW) has been developed by the ABS to describe how the range of flows and stocks of household economic resources can be brought together to provide a comprehensive measure of economic well-being for individual households. The paper sets out detailed descriptions of the contents, scope, boundaries and conceptual links between each component of the framework.
1.2. The paper also provides a conceptual link between these components of individual household economic well-being and those of the national economy as a whole. This is presented in Appendix 1 which compares the concepts and definitions used in the ICW with those used in the Australian National Accounts and in the international System of National Accounts (SNA93).
1.3. Where appropriate, the concepts and terminology used in the ICW framework are consistent with those used in the national accounts. However, because the focus of the ICW is on the individual household rather than the aggregated household sector, concepts, definitions and terminology have been modified where necessary.
Purpose of the framework
1.4. Within the broad purpose of measuring economic well-being, the framework is designed to allow for the measurement of:
- a household's power or command over economic resources;
- the extent to which a household is able to both consume and accumulate wealth and to make choices between these options; and
1.5. Together, these measures constitute a model that reconciles the several elements of income, consumption and net worth at the individual household level. Such a reconciliation will enable the derivation of measures of both household saving and total accumulation of wealth.
1.6. It is envisaged that the development of this framework will provide the following benefits:
- the changes that take place in a household's economic well-being over time.
- allow for the provision of conceptually consistent information and the illustration of the relationship between the components of household income and consumption flows;
- allow ABS clients and policy makers to place important, but limited, data available in the context of the full picture of household economic resources;
- encourage the development of imputation techniques, within and outside the ABS, for some of the missing data;
- facilitate discussions between the ABS and clients on priorities for future development of ABS collections;
- ensure that future collection and processing procedures used in the ABS follow consistent conceptual and classificatory practices; and
1.7. While occasional mention is made of operational considerations, the publication does not attempt to provide guidance on how the concepts should be operationalised in data collections and imputations. It does not discuss issues such as methods of valuation of imputed items which will be the subject of further research both within and outside the ABS.
1.8. Similarly, the publication does not attempt to set priorities for the collection of the different data items that go to make up the measure of economic-well-being. The setting of such priorities will be taken in conjunction with ABS clients.
Structure of the report
- facilitate the development of improved linking between national economic aggregates (macro data) and household surveys (micro data) on the income, consumption and accumulation of households.
1.9. The report is divided into two major parts. Part A (Chapters 1-6) presents the framework model. In Chapter 2 the underlying concepts and scope of the main components are described. This chapter also discusses links with other statistical frameworks such as the SNA, its Australian counterpart the ANA, and the ILO framework to ensure comparability wherever practicable.
1.10. Chapter 3 describes the flows and stocks used to measure economic well-being, and develops a model which links these together. Chapter 4 and Chapter 5 provide the definitions and descriptions of the main elements of these flows and stocks and Chapter 6 presents summary measures of economic well-being.
1.11. Chapters 7-18 provide detailed definitions and classifications of all components of the ICW framework. An appendix is attached which covers comparison of the ICW framework with the ANA and SNA93 (Appendix 1) and a bibliography (Appendix 3). The Glossary (Appendix 2 in the paper publication) has been placed in front of this topic for ease of access.