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WEALTH OR NET WORTH
Household wealth is represented by the household's net worth. In the HECS, the term 'net worth' is used in preference to 'wealth' because it more precisely reflects the nature of information captured in the HECS.
Net worth is calculated as the difference between the stock of household assets and the stock of household liabilities. Net worth is positive when the value of household assets is more than the value of household liabilities. Likewise, net worth is negative when household liabilities exceed household assets.
While there may be individual ownership of assets, the benefit of asset ownership is shared at least to some extent between members of the household. Therefore it is household net worth that is of most interest in analysing the economic wellbeing of individuals.
Assets can take many forms including:
Liabilities are primarily the value of loans outstanding including:
In the HECS, some asset and liability data are collected on a net basis rather than collecting for each component listed above. For example, if a survey respondent owns or part owns a business, they are asked how much they would receive if they sold their share of the business and paid off any outstanding debts.
For more details on the various components of wealth see Household Wealth and Wealth Distribution, Australia, 2011–12 (cat. no. 6554.0).
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