1. Household Economic Resources Discussant Comments UN EXPERT GROUP MEETING 9 September 2008 Garth Bode, Australian Bureau of Statistics

2. What does the paper from Bulgaria say?  The National Statistical Institute of Bulgaria’s paper (161/6) for this meeting identifies household economic resources: o as resources that have a monetary (market) value o that refer to a person's or family's income, consumption and wealth (ICW) o which include goods and services, tangible and intangible assets, financial assets and liabilities o which are relevant in the analysis of wellbeing at the household level

3. What are income, consumption and wealth?  Bulgaria’s paper goes on to note: o consumption is the use of economic resources o income is the receipt of economic resources o wealth is the ownership of economic resources o finding practical ways of measuring each of these aspects of economic resources is an on-going challenge

4. What's important in ICW analysis?  Bulgaria’s paper points to: o revealing the scale, severity and drivers of poverty o identifying the population groups and regions most affected by economic disadvantage o planning for those most in need of support o designing policies to reduce the risk of poverty (tax and transfer system)

5. Why bother with international standards for ICW?  Bulgaria’s paper also notes: o income based measures are those most often used across countries to describe economic wellbeing o it is therefore essential to have a common conceptual basis for income measurement and analysis across countries o wealth is the ownership of economic resources o finding practical ways of measuring each of these aspects of economic resources is an on-going challenge

6. Aspects of the Bulgarian statistics on household economic resources  Bulgaria’s data sources: o Household Budget Survey (HBS) annual o EU-SILC o Administrative data - European System of Social Protection (ESSPROS)

7. Bulgarian Household Budget Survey (HBS)  Bulgaria’s HBS objectives: o Multipurpose survey o Large number of uses and users o One prime objective of updating weights for CPI o Another objective - calculating the official poverty line

8. Bulgarian Household Budget Survey (HBS) cont'd  Bulgaria’s HBS methods: o 3,000 private households annually, 2-stage cluster sample o Representative, random, voluntary sample o Household is the social unit of measurement for collection and analysis o Face-to-face interviews, paper questionnaires, expenditure diaries o 12 divisions of consumption expenditure

9. EU-SILC  Bulgaria’s EU-SILC involvement: o 2 pilot waves in 2006 and 2007 o From 2008, EU-SILC in Bulgaria's National Program of Statistical Surveys o EU-SILC is a common framework rather than a common survey o Variables annually (primary) or 4-yearly or less (secondary) o common household and income concepts and classifications

10. EU-SILC  Bulgaria’s EU-SILC involvement cont'd: o EU-SILC variables of primary interest are Laeken indicators on income, poverty, social exclusion o Bulgaria still uses HBS data for compiling Laeken indicators o Bulgarian EU-SILC sample designed to combine cross- sectional and longitudinal requirements o Four year sample rotation, 75% overlap between waves o Effective sample of 4,500 households for 2007 data

11. ESSPROS  Bulgaria’s use of the European System of Social Protection: o Integrated system of social protection statistics o Provides coherent comparison between European countries of social benefits (in cash or in kind) and their financing o Modules on the number of pension beneficiaries and net social protection benefits

12. Other sources  Bulgaria has also conducted other studies into poverty and social exclusion: o Absolute poverty approaches in 1995, 1997 and 2001 –did not lead to an official poverty line being established o 2003 Multi-Topic Household Survey –data used to establish official poverty line

13. Lessons and challenges  Bulgaria learned from technical support/knowledge transfer in poverty monitoring  Wealth, inequality, poverty among the most sensitive topics to measure o and among the most difficult to measure in an internationally comparable way  Common frameworks rather than common surveys important to maximise comparability

14. Lessons and challenges cont'd  Interest in small area/population groups, but expensive to directly collect o therefore uses small area estimation and exploits administrative data  New challenges in child poverty, deprivation, social exclusion, housing etc  Many different approaches o absolute poverty (consumption based) o relative poverty based on income

15. Some reflections  Interest in social exclusion and economic disadvantage is very common  Approaches to data collection are similar o household surveys and administrative data sources both play a role  Common frameworks rather than surveys a good approach to standardising: o allows local differences to be managed in measurement towards a common concept

16. Some issues in difference - Australia's experience  Same strong interest in social exclusion and economic disadvantage  Approaches to data collection are similar  But, analytic approach is different: o less focus on relative poverty based on income alone o certainly less focus on poverty cut-offs o and the next two graphs show why

17. The first graph:  Income distribution for Australia (2003-04 financial year) o peaks in the distribution make it sensitive to cut-off measures at particular points o cut-offs may exaggerate poverty rates, especially when expressed in terms of a proportion of a median value

19. The second graph:  Looks at income distribution outcomes for a subpopulation for Australia (again 2003-04 financial year)  But this time for 'child poverty' o peaks in the distribution make it even more sensitive to cut-off measures at particular points

21. Some more reflections:  Common frameworks rather than surveys a good approach to standardising: o allows local differences to be managed in measurement towards a common concept  Common frameworks in analysis rather than necessarily common measures?  Suites of measures with relevance focussed upon for different economies o poverty gaps may mean more than cut-off head count measures

22. A new Canberra Report?  Or an expansion of the 2001 Canberra Report: o build on the fundamentals of the conceptual framework in 2001 report o look more closely at analysis and interpretation of results (one size doesn't fit all) o extend more fully into expenditure (low consumption possibilities) measures o incorporate wealth into the analysis

23. What else?  Exploration of equivalence in international comparisons o differences between economies, subpopulations and sub- national regions  Revisit economic resource distribution within households?  Reconciliation between macro/micro estimates to assess quality of national accounts o significant revisions to Australia's household balance sheet for dwelling values

24. What more?  More work on social transfers in kind - and fiscal incidence studies o again, integrating macro and micro sources and methods

25. Thank you.