Household Income and Expenditure 2012 Household Budget Survey By Sanjev Bhonoo 18 November

Household Budget Survey 2012 Survey on private non-institutional households conducted in Mauritius and Rodrigues Period : January to December households surveyed Main data items: income and expenditure Conducted every 5 years to take account of the changes in the consumption pattern of the population (ILO recommendation) 2

Objectives of the Household Budget Survey Determine the content of Consumer Price Index (CPI) basket Estimate weight (importance) of each item in the basket Distribution of household income and expenditure Poverty analysis and other analyses 3

CPI basket of goods and services The Consumer Price Index (CPI) is a measure of changes over time in the general level of prices of goods and services, which the private consumer buys The CPI basket is based on the expenditure pattern of households during a specific period The weight is the relative importance of each item in the basket with respect to the expenditure 4

CPI weight by major division 2001/02, 2006/07 and

Major changes in weight by selected division 2001/02, 2006/07 &

Increases ElectricityFrom 32 to 38 Mobile phone callsFrom 4 to 11 Internet connectionFrom 2 to 11 University feesFrom 3 to 19 Prepared foodFrom 16 to 24 Decreases Bus fareFrom 26 to 11 Fixed telephone callsFrom 14 to 11 NewspaperFrom 9 to 4 Some item wise changes in weight, 2001/02 to

CPI basket’s weight – comparison with other countries DescriptionUKS. Africa Mauritius MalaysiaBurundi Food and non-alcoholic beverages Alcoholic beverages and tobacco Clothing and footwear Housing, water, electricity, gas and other fuels Furnishings, household equipment and routine household maintenance Health Transport Communication Recreation and culture Education Restaurants and hotels Miscellaneous goods and services Total1000 8

Household Disposable Income, 2012 Avg. monthly household disposable income was Rs 29,360 The average household size was 3.5 There were 2 income earners per household 9

Household disposable income composition, 2012 Income from paid employment is the major source of household income Property income has a negligible share of total income 10

Household Consumption Expenditure, 2012 Average monthly household expenditure was Rs 23,930 in 2012 of which:Rs% Food & non alcoholic beverages6, Transport3, Housing, water, electricity, gas and other fuels2, Alcoholic beverages & tobacco2, Education1, Health

Lowest decile No. of income earners per household = 1.4 No. of persons working per household = % own their house & 21% had free accommodation Household size : 3.3 Highest decile No. of persons working per household = 1.8 No. of income earners per household = % own their house & 4% had free accommodation Household size : Profile of households in lowest and highest income deciles, 2012

Lowest decile Monthly disposable income = Rs 7,200 Share of employment income = 41% Share of transfer income = 43% Highest decile Monthly disposable income = Rs 84,600 Share of employment Income = 76% Share of transfer income = 9% Profile of the households, 2012 (continued) 13

Lowest decile Monthly consumption expenditure = Rs 8,000 Share of food : 47% Share of transport: : 6% Share of education : 3% Highest decile Monthly consumption expenditure = Rs 52,600 Share of food : 17% Share of transport: : 30% Share of education : 7% Profile of the households, 2012 (continued) 14

Income inequality, 2012 Gini coefficient = (0 – complete equality, 1 – complete inequality) 15

Gini coefficient - international comparison Selected countriesLatest available data France0.293 Australia0.320 Japan0.329 India0.339 United Kingdom0.342 United States0.378 Thailand0.394 Mauritius0.413 Madagascar0.441 China0.474 Singapore0.478 Botswana0.610 South Africa0.631 Seychelles

Share of household income, 2012 The highest 10% of households received some 30% of the total income, while the lowest 10% of households received only some 2% of the total income 17

Evolution of household income and expenditure, 2001/02 to /022012% increase Real increase (adjusted for inflation rate and change in hh size) Annual growth rate Avg. monthly household income (Rs) 14,23029, %28.8%6.8% Avg. monthly household expenditure (Rs) 11,39023, %31.1%7.0% 18

Distribution of household income, 2001/02 to 2012 The graph for 2012 is more flattened compared to that of 2001/02 and 2006/07, indicating a spread in the income distribution The household deriving high income has increased, e.g., 13% of households had an average monthly income of Rs 50,000 or more in 2012 compared to only 2% ten years back 19

Trends in income inequality - Gini coefficient, 2001/02 to /022006/ Gini coefficient A higher Gini coefficient over the past 10 years indicates income inequality is on the rise The further away the curve is from the equality line, the larger is the Gini coefficient, i.e. higher income inequality. 20

Trends in income inequality - income share, 2001/02 to /022006/ Share (%) of total income going to : Lowest 20% of households Highest 20% of households Ratio of highest 20% to lowest 20% Income share for lowest 20% of households Income share for highest 20% of households 21

Thank you 22