This publication is categorised as a CSO Frontier Series Output. Particular care must be taken when interpreting the statistics in this release as it may use new methods which are under development and/or data sources which may be incomplete, for example new administrative data sources.
This publication provides distributional information on household income, consumption and saving for the period 2010-2015 consistent with national accounts. The approach taken largely follows the guidelines published by the OECD in December 2020.
The OECD guidelines outline a five-step procedure for estimating distributional national accounts:
The OECD guidelines recommends adjusting national account’s totals to exclude activity which relates to non-private dwellings such as prisons, boarding schools and nursing homes etc. The rationale being that such dwellings are not captured in the sampling frame of micro sources. However, given the relatively small magnitude of the adjustment and the benefits of maintaining coherence with national accounts totals, no adjustment was made for non-private dwellings.
The primary micro data is from the Survey on Income and Living Conditions (SILC) and the Household Budget Survey (HBS). The SILC primarily provided information on income while the HBS provided information on consumption. While the SILC is published annually, the HBS is published only every five years or so. To obtain annual microdata on consumption, the 2010 and 2015 HBS were linked based on the socio-demographic characteristics of the households. A unique link between households with the same socio-demographic characteristics was then created based on the income rank of the households. A linear interpolation was then used to impute values for the years between 2010 and 2015. Finally, the SILC and the HBS data are linked based on socio-demographic information and income.
There are several national accounts transactions which have no counterpart in the microdata. For these transactions, proxies have been used to obtain distributional information. For example, administrative data on education and health expenditure was combined with socio-demographic information in the SILC to distribute social transfers in kind. Data on country of birth in the SILC was used to proxy distributional information on remittances.
To scale the micro data to national accounts totals, proportional allocation was used in most cases, ie the gap between the micro-data and the national accounts total was distributed proportionally across all households. Such an approach assumes that the micro data distribution is close to the actual national accounts distribution which may not be appropriate.
For certain items, Gross Mixed Income, Compensation of Employees, Taxes on Income and Distributed Income of Corporations, administrative tax data was utilised to inform the distribution of the gap between the micro data and national accounts totals.
The primary breakdown is to group households into income quintiles on the basis of their equivalised household disposable income. Equivalised here means that a household’s income is adjusted to take account of the size and composition of the household. This is achieved by calculating income on a per consumption unit basis where for this exercise the first adult counts as 1 consumption unit, each additional person aged 14 and over counts as 0.66 consumption units and each child below the age of 14 counts as 0.33 consumption units. Equivalised disposable income for each household is calculated as disposable income divided by the sum of consumption units in the household. Households can then be ordered based on their equivalised disposable income and assigned to quintiles in such a way that each quintile represents 20 per cent of all the households.
Results are also presented by household type and tenure status.
