ICW – progress report Item 4.6 of the agenda DSS Meeting 2 and 3 March 2017 – erm

Outline 1. Background 2. Debriefing of the workshops 3. Micro-micro: results of the matching between EU-SILC, HBS and HFCS 4. Micro-macro: action plan for the linkage on ICW surveys and Household Account 5. Discussion Eurostat

Two different streams of work Better joint distributions at micro level: ideally a joint micro-data set, from which meso-indicators could be calculated Better consistency between micro-data and aggregates, when concepts and data are compatible (DMES) Parallel, but strong links

Debriefing of the workshop 1 - Micro Held on 21 October 2016 in Eurostat Aim: sharing national experiences on survey integration, modular approach, multi-source (e.g. registers), statistical matching Various presentations were given: Survey integration (HU, UK, CH, CZ) Multi-source (FI) Statistical matching (IT, AT, Eurostat, ECB)

Debriefing of the workshop 1 Take-away from the workshop: Survey integration is possible; experiments involving integration of SILC/HBS and SILC/HFCS Multi-source/modular approaches should be used whenever possible Need for sharing experience of statistical matching and modular approach

Debriefing of the workshop 2 – Micro - Macro Held on 9 November 2016 in Eurostat Aim: sharing work done in the area by the NSIs, Eurostat, ECB and OECD Various presentations: National experiences (UK, SI, IT, DK, FR) International organizations (ECB, OECD)

Debriefing of the workshop 2 Take-away of the workshop: Coherence for micro-sources needs to be improved Enhancement of the cooperation at NSI level is needed, as well as among institutions Quality aspects of the current statistics and distributional data have to be developed The communication strategy of the distributional data needs transparency

Micro-micro On-going reflections on the different options/guidelines for a better measurement of ICW joint distributions Experiments on data Following the first implementations in 2012-2013, a global experiment involving (almost) all EU countries has been developed on EU-SILC, HBS and HFCS data

Strategy Relying on cumulated experience by Eurostat on the topic Test various methods One purely based on hot-deck: take observations in HBS with the same Xs and allocate to EU-SILC Multi-dimensional, non-parametric, stochastic A mixed approach: estimate the conditional mean of consumption with respect to X, then allocate observations in HBS to EU-SILC using the cumulative distribution function Unidimensional, semi-parametric, randomness goes through the estimation of the equation

Choice of the covariates X Following D'Orazio et al. (2006), comparability between EU-SILC and HBS is key Ex-post harmonization process Selection of candidate variables based on Hellinger distance Automatic selection procedure implemented for method 1; comprehensive set of covariates for method 2.

About the W in ICW… Wealth is covered by the Household Finance and Consumption Survey implemented in the euro area countries (+ a few more) For the available countries, matching between the fused SILC-HBS dataset and HFCS Relies on the cumulative distribution function of gross income (measured in SILC and HFCS) + stratification on household type + food consumption

Median saving rates in EU

Saving rates and life-cycle theory

Assessment of the uncertainty Monte-Carlo approach: replicate hot-deck 1,000 times Facing multiply-imputed data → impact on the estimation method Computationally demanding; does not relax CIA "Frechet bounds" approach Relaxing CIA Relying on "granular" data

The distribution of consumption is well reproduced…

… the distribution of savings may be a bit distorted

Extending indicators of poverty Consumption-based indicators CPS-like absolute measure of poverty AROPE-like measure (60% of median eq. expenditure) as in Tonkin et al. (2017) Saving-based indicators Proportion of dissaving households Asset-based indicators As in Brandolini et al. (2009) or Törmalehto et al. (2012) 𝑾 𝒕 𝒆 𝒕 = 𝒎 𝟏𝟐 .𝝀.𝒎𝒆𝒅𝒊𝒂𝒏( 𝒀 𝒕 𝒆 𝒕 )

Other ongoing experiments/leads OCW module in EU-SILC 2017, to be analyzed after the data transmission Results on country-specific wealth modules (FR, CH)

Action plan End of Q1-2017: dissemination of experimental results based on statistical matching. Definition of a quality framework and guidelines for the end of 2017. Guidelines should include considerations not only about statistical matching, but also about multi-source approach, survey integration and harmonization issues. Centralized exercise, based on harmonized data, discussed, complemented or substituted with MS data

Linkage micro-macro – why do we care?

Linkage micro-macro

Closing the data gaps? Some work implicitly assumes a uniform under-reporting phenomenon depending on the item What about under-representation of the upper tail of the distribution? Closing the gaps entails making assumptions on the reasons for discrepancies Eurostat's position: develop a quality framework performing sensitivity analyses on assumptions made

Action plan 2017-2020 To be discussed and coordinated between Directors of Macroeconomic Statistics and Directors of Social Statistics Actions should primarily target Income and Consumption. Wealth is to be covered in cooperation with the ECB. Cooperation aspects at inter-institutional level will be tackled once the content is agreed Centralized exercise, based on harmonized data, discussed, complemented or substituted with MS data

Action plan 2017-2020 – Micro-Macro Strand 1: systematic identification of methodological similarities and data coverage Strand 2: Investigation of the data sources and the estimation methods Strand 3: Identification and quantification of the data gaps, development of the quality framework Strand 4: Refinement of the statistical methods in order to close the gaps Strand 5: Development of the data dissemination strategy

Need for better ICW Many initiatives Interest for ESS action – DGINS – Coordinated Two streams proposed Starts with an harmonised approach Quality assessment framework Discussed/complemented/supplemented by better data Experimental statistics

DSS is invited to … Comment the proposed content of the two action plans for further improvements; Comment on the respective roles of Eurostat, NSIs and others; Comment the different results and the dissemination strategy; Bring new ideas… Eurostat