Household Economic Survey (Income): Year ended June 2014 Embargoed until 10:45am 27 November 2014 Key facts Household income: Between the two years ending 30 June 2012 and 30 June 2014, average annual household income from: total regular sources of income rose from $81,227 to $88,579 (up 9.1 percent) wages and salaries rose from $82,029 to $88,357 (up 7.7 percent) New Zealand Superannuation and war pensions rose from $22,342 to $23,654 (up 5.9 percent). Housing costs: For the same period, average weekly: total housing costs increased from $256 to $284 (up 11.1 percent) mortgage payments increased from $357 to $389 (up 9.1 percent) spending on property rates increased from $42 to $47 (up 12.5 percent).
Liz MacPherson, Government Statistician ISSN 1178-0478 27 November 2014 2
Commentary Overview Incomes increase Housing costs increase Housing costs rise more than income Life satisfaction and adequacy of income All income and expenditure changes in this commentary are statistically significant unless otherwise specified. All income figures in this information release refer to gross (before tax) income. Overview Between the two years ending 30 June 2012 (2011/12) and 30 June 2014 (2013/14): average annual household income from regular sources increased by 9.1 percent (from $81,227 to $88,579). average weekly expenditure on housing costs increased by 11.1 percent (from $256 to $284). Due to household expenditure increasing more than household income, the housing-costs-toincome ratio also increased. This meant that, on average, for the year ended 30 June 2014, 16.3 percent of a household's income was spent on housing costs. The change in average annual household income over the two years was due to average annual personal income increasing from $41,639 to $45,491 (up 9.3 percent), for those aged 15 years and over. Contributing to this increase were rises in income from wages and salaries, and for New Zealand Superannuation and war pensions. We have mainly compared the current household income and expenditure figures with the 2011/12 HES (Income) rather than the 2012/13 HES due to differences in the level of detail collected in the expenditure questionnaires asked in the two surveys. See data quality for more information about the differences between the two collections. Incomes increase Note: All income figures relate only to people and households reporting that source of income. Household income Change over one year: From 2012/13 to 2013/14, average annual household income from total regular sources increased by 3.5 percent, from $85,588 to $88,579. This change was not statistically significant. The number of households receiving: less than $32,100 annually rose by 2.9 percent (the lowest quintile in 2012/13) more than $123,300 annually rose by 14.7 percent (the highest quintile in 2012/13). 3
Change over two years: From 2011/12 to 2013/14, average annual household income from regular sources increased from $81,227 to $88,579 (up 9.1 percent). This change was mainly due to increases in: wage and salary income, up from $82,029 to $88,357 (7.7 percent). New Zealand Superannuation and war pensions, up from $22,342 to $23,654 (5.9 percent). Personal income Change over one year: From 2012/13 to 2013/14, average annual personal income from regular sources increased by 2.4 percent, from $44,426 to $45,491. This change was not statistically significant. Change over two years: From 2011/12 to 2013/14, average annual personal income from regular sources increased from $41,639 to $45,491 (up 9.3 percent). This change was driven by increases in: wage and salary income, up from $46,169 to $49,396 (7.0 percent). This change was partly due to minimum wage increases, up 11.8 percent from 2010 to 2014 New Zealand Superannuation and war pensions, up from $16,276 to $17,213 (5.8 percent). From 2011/12 to 2013/14, the number of people receiving this source of income increased 9.4 percent. Over the four years, adjustments were made to New Zealand Superannuation and war pension payments, with increases of 4.66 percent in 2010, 4.40 percent in 2011, 2.65 percent in 2012, and 2.44 percent in 2013. 4
Housing costs increase Note: All household expenditure figures relate only to households reporting that expenditure. Housing costs include expenditure on rent and mortgages (both principal and interest payments), property rates, and building-related insurance. From 2011/12 to 2013/14, average weekly expenditure on housing costs increased from $256 to $284 (up 11.1 percent). Mortgage payments Mortgage payments include principal repayments and interest payments, as well as application and service fees. For the year ending 30 June 2014, mortgage payments contributed 45 percent of total housing costs. From 2011/12 to 2013/14, average weekly mortgage costs increased from $357 to $389 (up 9.1 percent). This was due to a 14.8 percent increase in expenditure on principal repayments, as well as a non-significant increase of 5.9 percent on interest payments. Rent Rent payments include rent paid for primary property, that paid for other properties, and other payments connected with renting such as rental bonds, administration fees, ground rent, and easement. From 2011/12 to 2013/14, average weekly rent payments increased from $273 to $290 a statistically non-significant increase of 6.3 percent. Contributing to this change was an increase in average rent payments in the Canterbury region. Average weekly household spending on rent was highest in Auckland ($353), followed by Wellington ($308). 5
Rates Property rates include water rates and charges, local and regional authority rates for primary property and other properties, and other payments to local authorities. From 2011/12 to 2013/14, average weekly spending on property rates increased from $42 to $47 (up 12.5 percent). Spending on rates was highest in the Auckland region ($52) followed closely by Wellington region ($51). Building-related insurance Building-related insurance includes insurance on buildings, and on combined policies that may also include house contents and vehicles. From 2011/12 to 2013/14, average weekly household spending on building-related insurance increased from $19 to $26 (up 36.1 percent). Many insurance providers made changes to home insurance policies during 2012 and 2013. These included increasing insurance premiums, as well as insuring homes for a maximum specified amount rather than total replacement cost. Housing costs rise more than income The housing-costs-to-income ratio is calculated by dividing total housing costs for all households by total regular income for all households. It is often used as a measure of housing affordability. In 2013/14, total housing costs accounted for 16.3 percent of total household income from regular sources. This compares with 15.4 percent in 2012/13, and 16.0 percent in 2011/12. The increase in the ratio for 2013/14 was largely due to average annual housing costs increasing by 8.6 percent, while average annual household income increased non-significantly (3.1 percent). For households that owned or partly owned their dwelling, 14.1 percent spent 30 percent or more of their total household income on housing costs. For households that did not own their dwelling, 34.2 percent spent 30 percent or more of their total household income on housing costs. Note: The numbers for those who own, or partly own, their dwelling include those who have paid off their mortgage and thus have reduced housing costs. 6
Life satisfaction and adequacy of income One person 18 years or over in every household was randomly selected to complete an additional questionnaire on behalf of the household. This person was asked questions that included: how satisfied they were with their life at the time of the interview how adequately their household income met their everyday needs. Life satisfaction In the year ended 30 June 2014: 80 percent of respondents said they were satisfied or very satisfied 6 percent of respondents said they were dissatisfied or very dissatisfied 13 percent of respondents said they were neither satisfied nor dissatisfied. 7
Adequacy of income Respondents were asked how well their total income meets their everyday needs for accommodation, food, clothing, and other necessities. 58 percent of respondents reported their income was enough or more than enough to meet their everyday needs. 41 percent of respondents said that their income was just enough or not enough to meet their everyday needs. For households where total income was less than $31,900, 63 percent of respondents said their income was not enough or only just enough to meet their everyday needs. For households where total income was greater than $131,700, 16 percent of respondents said their income was not enough or only just enough to meet their everyday needs. 8
For more detailed data, see the Excel tables in the 'Downloads' box. 9
Definitions About the Household Economic Survey (Income) HES (Income) provides a comprehensive range of statistics relating to income, expenditure, and personal and household demographics. The survey shows annual income from all sources at both the person and the household level. The Household Economic Survey (Income) is a shortened version of the full three-yearly Household Economic Survey (HES). The shorter survey runs in the two years between the full HES to collect data on household and personal income, material well-being, and housing-cost expenditure. The main differences between the two surveys are that in HES (Income) the only expenditure data collected relates to some types of housing costs, and there is no diary-sourced detailed expenditure information. Housing costs information collected from HES (Income) includes expenditure on rent and mortgages, property rates, and building-related insurance. HES (Income) can be compared with the full HES for most measures. However, differences in the questionnaire can affect the numbers reporting expenditure from mortgages and loans. See Differences between full HES and HES (Income) for more information. More definitions Aggregate: the sum of all the values of a certain indicator. For example, aggregate income from wages and salaries for total New Zealand is the sum of wages and salaries income in New Zealand earned by the population. Average (mean): the average value the mean is calculated by adding two or more figures and dividing the sum by the number of figures. Building-related insurance: a household has this expenditure when it pays premiums to an insurance company or broker for coverage in the event of damage occurring to a dwelling. Where building-related insurance is part of a combined insurance policy, the expenditure may also include premium paid for house contents and vehicles. See Differences between full HES and HES for more information. Deciles: formed by dividing the population into 10 equal groups, from lowest to highest. The bottom decile (decile 1) is the lowest 10 percent of the population, while the top decile (decile 10) is the highest 10 percent. Dwelling ownership: aggregation of categories from the 'tenure of household' classification. Tenure refers to the occupancy a household has in a private dwelling. It does not refer to the tenure of the land on which the dwelling is situated. The dwelling can be classified in two ways: 10
Owned or partly owned: dwellings that are held (or not held) in a family trust, regardless of whether mortgage payments are made or not made for the dwelling. Dwelling not owned: dwellings where the household does not own the dwelling, and either pays rent or lives there rent-free. Expenditure: the amount of money spent on specified items or services. All expenditure includes goods and services tax (GST) and excise duties. For those making mortgage/rent payments: includes only households who say they make either a mortgage or rent payment. Household: either one person who usually resides alone, or two or more people who usually reside together and share facilities (such as for eating, cooking, or a living area; and bathroom and toilet) in a private dwelling. A household may contain one or more families, other people in addition to a family, or no families at all, such as unrelated people living together. Housing-costs-to-household-income ratio: aggregate housing costs for all households as a proportion of the aggregate household income for all households. This measure is often used as an indicator of housing affordability. This ratio is typically calculated by using disposable household income (gross income minus income tax) instead of before-tax (gross) income. Only gross income is reported in this release. This means our housing-costs-to-(gross)-household income ratios may be slightly lower than ratios reported from other data sources. Our measure includes households that do not make mortgage or rent payments. Imputation: replaces missing values with actual values from similar respondents. For more information, see imputation in data quality. Income: before-tax (gross) income. Income in this release is not equivalised. That is, it is not adjusted to remove the effects of household size or household type (eg the number of dependent children). Income received from this source: includes only people or households that receive the specified source of income used in calculating averages and medians (so excludes those reporting no income from the specified source). Investment income: net profit or loss received from investments. Investments captured in this collection are rent, rents from Māori land or other leased land, dividends from New Zealand companies, royalties, or interest from: banks, other financial institutions, bonds, stocks, money market funds, debentures, or securities. Irregular income: income from inheritances, matrimonial settlements, lump-sum life insurance pay-outs, lump-sum bursaries and prizes, and gifts of money from other New Zealand households. Median: the point where half the population is above and half below the stated amount. Mortgage payments: mortgage principal repayments, mortgage interest payments, and application and service fees for mortgages. 11
New Zealand Superannuation and war pensions: New Zealand Superannuation, and veteran s, war disablement, and surviving spouse pension,and overseas pension top-up payment made by Work and Income New Zealand. Other government benefits: includes all family assistance payments such as those made as part of the Working for Families package. This category also includes main benefits (ie benefits discontinued from 15 July 2013 such as unemployment, sickness, widow s, invalid's, and domestic purposes, as well as new benefits starting from 15 July 2013 such as jobseeker support, sole parent support, and supported living payments), and student allowances, emergency benefits, and supplements. Other sources of regular and recurring income: income received from trusts, annuities, alimony, educational scholarships, and income protection insurance. Percentage of households reporting: sum of the households reporting expenditure or income, divided by the number of households in the population. Private superannuation income: income received from both job-related superannuation schemes and other private schemes. Quartiles: formed by dividing the population into four equal groups, from lowest to highest. The bottom quartile (quartile 1) is the lowest 25 percent of the population, while the top quartile (quartile 5) is the highest 25 percent. Quintiles: formed by dividing the population into five equal groups, from lowest to highest. The bottom quintile (quintile 1) is the lowest 20 percent of the population, while the top quintile (quintile 5) is the highest 20 percent. Region: the HES sample design has five broad regions. The Wellington and Canterbury regional council areas, and the Auckland Council area, are separate regions. The remaining regional council areas are grouped as: Rest of the North Island: Northland, Waikato, Bay of Plenty, Gisborne, Hawke's Bay, Taranaki, and Manawatu-Wanganui regional council areas Rest of the South Island: Nelson, Marlborough, Tasman, West Coast, Otago, and Southland regional council areas. Rent payments: rent paid for primary property, for other properties, and other payments connected with renting that is, bonds, ground rent, and easements. Rents: rent payments paid by the household. Imputed rent (the estimated benefit value from home-ownership of not having to pay rent, partly offset for home-owners by the expenses of home ownership) is not reported in this release. Sampling weights: the number of units in the population represented by the sample member. Self-employment income: the net profit or loss received from all current and previous selfemployment jobs held over the reference period. It includes drawings (cash or goods the respondent takes out of the business instead of a 'wage'). Statistical significance: in statistics, a result is considered significant not because it is important or meaningful, but because it is predicted as unlikely to occur by chance alone. 12
Total housing costs: expenditure from: mortgage principal repayments, mortgage interest payments, mortgage application fees, rent payments, other payments associated with renting (eg bonds paid in the last 12 months), property rates payments (both regional and local government), and payments associated with building-related insurance. See Differences between HES and HES (Income) for a complete list of expenditure collected in HES. Wages and salaries: income received from all current and previous wage and salary jobs held over the reference period. This includes any job-related bonuses, commissions, redundancies, or other taxable income such as honoraria or directors fees. A respondent can have an employment status of self-employed, but receive wage and salary income instead of self-employment income. 13
Related links Upcoming releases Household Economic Survey (Income): Year ended June 2015 will be released in November 2015. Subscribe to information releases, including this one, by completing the online subscription form. The release calendar lists all our upcoming information releases by date of release. Past releases See Household Economic Survey for links to past releases. Related information Consumers price index measures the price change of goods and services purchased by private New Zealand households. Food price index measures the rate of price change of a fixed basket of food goods and services purchased by households. New Zealand Income Survey provides a snapshot of regular weekly income for individuals and households. Household incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2011 is a Ministry of Social Development report that analyses HES data in depth. User guide for wage and income measures has more information about using wage and income measures. Regional benchmarks for HES has more information about the benchmarks introduced for HES (Income): Year ended June 2012. 14
Data quality Period-specific information This section contains information about changes affecting the latest data. Recall period External influences Changes to the questionnaires Response rate to HES (Income) 2013/14 Imputation for HES (Income) 2013/14 Sampling errors General information This section contains information about data that does not generally change between releases. About the survey Accuracy of the data Population weights and benchmarks Under-reporting expenditure Comparing data with other HES years Using non-monetary indicator data Interpreting the data and confidentiality Period-specific information Recall period We collected data in this release between 1 July 2013 and 30 June 2014. The majority of housing-cost expenditure was collected as 'latest payment' meaning the amount most recently spent on this item. However, for some housing costs, we asked respondents about their spending in the 12 months before the interview examples include easement or ground rent, and lump-sum payments connected with renting (bond payments or rent administration fees). Expenditure data collected by 12-month recall period essentially covers a two-year period from 1 July 2012 (for households contacted on the first day of the survey,1 July 2013) through to 30 June 2014 (those interviewed in the last month of the survey). For information on income, each household member aged 15 years and over is asked about their income for the year before their interview date. As a result, income data also covers a two-year period. The figure below demonstrates how the recall period can overlap with a previous reporting period. 15
External influences Changes in income and expenditure will be influenced by real world changes that come into effect during the collection period. Changes to the benefit system Significant changes for benefits types, and obligations beneficiaries must meet, came into effect on 15 July 2013. Three new benefits replaced most of the previous main benefits as outlined in the table below. 16
Changes to New Zealand's benefit system New benefit (effective 15 Old benefit July 2013) Unemployment benefit Sickness benefit Domestic purposes benefit women alone Domestic purposes benefit sole parent if youngest child is Jobseeker support aged 14 or over Widow's benefit without children, or if youngest child is aged 14 or over Domestic purposes benefit sole parent if youngest child is aged under 14 Sole parent support Widow's benefit if youngest child aged under 14 Invalid's benefit Supported living payments Domestic purposes benefit care of sick or infirm There was no change to: emergency benefit, orphan s benefit, unsupported child s benefit, youth payment, and young parent payment. As a result of these changes, we redesigned the questions relating to payments from Work and Income (WINZ). This was to ensure that respondents reported both the old and new benefits they received (where applicable), and to avoid any overlap in the number of weeks the new and old benefits were received. However, from survey figures it is evident that some respondents may not have reported both their old and new benefits, which has led to a decrease in the length of time benefits were received. This in turn has affected the total income from government benefits. It is difficult to assess how much of this is due to mis-reporting by respondents and how much is due to real-world changes. Other events that could have influenced the HES (Income) 2013/14 income data include: annual increases in the adult minimum wage from $13.00 in April 2011 to $14.25 from 1 April 2014. increases in government transfer maximum rates for main benefits and student allowances. The most-recent increase of 1.38 percent was from 1 April 2014. increase in New Zealand Superannuation rates. The most-recent increase of 2.66 percent was from 1 April 2014. Other changes The move by most insurance companies in New Zealand to insure homes for a maximum specified amount rather than total replacement cost may have affected household spending on housing costs. Changes to the questionnaires Benefit changes necessitated our making multiple changes to the questions asked in the income questionnaire in HES (Income). Compared with HES 2012/13 and HES (Income) 2011/12, we made the following changes: Listed WINZ benefits across four showcards instead of a single showcard. While showcard 16a listed continuing benefits (those that did not change from 15 July 2013), showcard 16b only listed benefits discontinued from 15 July 2013; showcard 16c only 17
listed new benefits introduced from 15 July 2013 and showcard 16d listed only emergency benefits. Listed WINZ supplements in two different showcards while showcard P18a listed supplementary benefits that were included with a main benefit or pension, showcard P18b listed those received as a standalone supplement. Added a new question to capture any other benefit that respondents may have received from WINZ or Studylink, which had not been reported in any previous question. Replaced 'independent youth benefit' with 'youth benefit/youth parent payment'. Deleted special transfer allowances and special needs grants from the benefits/supplements listed in the showcard because fewer people received these benefits. Deleted recoverable assistance payments these payments are to be paid back and hence are not income. See Household Economic Survey 2013/14 printable questionnaires for the latest questionnaires. Response rate to HES (Income) 2013/14 The target response rate for HES (Income) is 75 percent of eligible households. Our achieved response rate for the year ended 30 June 2014 was 80.9 percent (post-imputation). We calculate the response rate by determining the weighted number of eligible households that responded to the survey as a proportion of the estimated weighted number of total eligible households in the sample. Imputation for HES (Income) 2013/14 Imputation in HES replaces missing values with actual values from similar respondents. The table shows the effect of imputation for the 2013/14 survey. Number of individuals before and after imputation Year ended 30 June 2014 Number of people aged 15+ Eligible individuals pre-imputation 6,485 Individuals imputed 151 Recovered records 208 Eligible individuals post-imputation 6,844 See imputation for more information. As a result of recovering and imputing records, the response rate for the year ending 30 June 2014 improved from 78.0 percent to 80.9 percent. Sampling errors Sampling error refers to the variability that occurs by chance because we survey a sample rather than an entire population. This is calculated from the variability of the observations in the sample. We use the jackknife method to calculate sampling errors. It is based on the variation between estimates of different subsamples we take from the whole sample. 18
The tables below summarise the sampling errors for 2011/12, 2012/13, and 2013/14, by income source and housing-cost type. The tables also indicate the variability of the estimates for the three surveys. Data users should take care when interpreting income or expenditure estimates with sampling errors greater than 20 percent. They are less statistically reliable than estimates with sampling errors less than or equal to 20 percent. See Reliability of survey estimates for more information. Sampling errors for average annual household income, by income source (for households receiving that source of income) Year ended 30 June 2012, 2013, and 2014 Level sampling error (%) Income source 2011/12 2012/13 2013/14 Wage and salaries 3.4 4.3 3.4 Self-employment 44.9 30.1 22.9 19.8 Investments 16.1 18.5 Private superannuation 31.6 20.3 19.5 New Zealand Superannuation and war pensions 2.9 3.2 2.9 Other government benefits 6.9 8.0 7.2 Other sources 18.4 24.5 19.0 Total regular income 3.2 4.0 2.9 Sampling errors for average weekly household expenditure, by housing cost type (for households with that type of expenditure) Year ended 30 June 2012, 2013, and 2014 Expenditure item Level sampling error (%) 2011/12 2012/13 (1) 2013/14 Property and ground rent 3.9 4.2 4.6 Other payments connected with renting 16.1 17.8 19.8 Total rent payments 4.2 4.3 5.2 Mortgage principal repayments 6.3 7.4 7.3 Mortgage interest payments 5.6 7.8 6.2 Application and service fees for mortgages 35.9 51.5 33.6 Total mortgage payments 5.2 6.8 5.9 Property rates 4.2 3.4 3.4 Building-related insurance 5.6 4.1 4.7 Other housing costs 23.6 35.9 48.8 Total housing costs 4.0 4.0 4.2 19
1. Diary expenditure excluded from sample error calculations to improve comparability between full HES and HES (Income) Contact info@stats.govt.nz for more detailed sampling errors. General information About the survey As with the full HES, our target population for HES (Income) is the usually resident population of New Zealand living in private dwellings, aged 15 years and over. This population does not include: overseas visitors who are in New Zealand for less than 12 months people living in non-private dwellings, such as hotels, motels, boarding houses, hostels, and homes for the elderly patients in hospitals, or residents of psychiatric or penal institutions members of the permanent armed forces in group living facilities (eg barracks) people living on offshore islands (excluding Waiheke Island) members of the non-new Zealand armed forces non-new Zealand diplomats and their families. HES (Income) components HES (Income) has four survey components: a household questionnaire a shortened expenditure questionnaire collecting household housing costs an income questionnaire for each household member aged 15 years and over a set of non-monetary indicator questions for one member of the household who is 18 years and over (chosen randomly). This survey uses computer-assisted interviewing that we first introduced in the 2006/07 interview period. See printable versions of the questionnaires for survey questionnaires used for 2013/14. Sample design information We select the sample for HES (Income) using a two-stage stratified cluster design. Households are sampled on a statistically representative random basis from areas throughout New Zealand. The sample is stratified by geographic region, urban and rural area, ethnic density, and socioeconomic characteristics. The HES (Income) sample has approximately 4,700 private households. We obtain information for each member of sampled households that fall within the scope of the survey and meet survey coverage rules. 20
Accuracy of the data Reliability of survey estimates Two types of error are possible in estimates based on a sample survey sampling error and non-sampling error. Sampling error is a measure of the variability that occurs by chance because a sample rather than an entire population is surveyed. Non-sampling errors arise from biases in the patterns of response and non-response, questionnaire design, inaccuracies in reporting by respondents, and errors in recording and coding data. We endeavour to minimise the impact of these errors by applying best practice survey methods and monitoring known indicators (eg non-response). Data validation and editing As part of the quality check process, we put HES (Income) data through a validation process at the end of each quarter of the survey cycle. This involves looking for any unexplained outliers, as well as comparing data against previous HES data, as well as other sources, for any movements we cannot explain by real-world changes. Using computer-assisted interviewing allows range and consistency edits to be made in the questionnaire, meaning interviewers can check improbable values and the consistency of responses during the interview. This reduces errors within the data. Once the data are electronically loaded to the processing database, we edit the data and resolve inconsistencies and errors. Proxy We allow a proxy to provide information for the income questionnaire in family type households: where the whole household is informed about the survey. All agree to participate, but are not able to be present when we administer the questionnaires for children away at boarding school for people who don't work and have no source of income for the elderly, sick, or mentally incapacitated. In all cases of proxy interviews, the interviewer must be convinced the proxy is totally familiar with the other respondent s information. Imputation Imputation is a type of error treatment where we determine replacement values for some or all fields, and then assign these values to fields in individual records to replace erroneous or suspicious data. Imputation in HES replaces missing values with actual values from similar respondents. We use the nearest neighbour donor imputation method, where missing values are replaced by data values from another record called a donor. We select a donor is by finding a respondent with matching characteristics to the recipient, on variables correlated to the missing values. 21
We introduced imputation into HES in 2009/10. We also applied it to data for 2006/07 (HES), and 2007/08 and 2008/09 (HES Income) and revised the data. Imputation is applied to a household where the household does not supply all the required income or diary information, but supplies sufficient information to be retained in the sample. For households where at least one significant person has a fully completed income questionnaire, we impute income questionnaires for other household members who have not fully completed their income questionnaire(s). In full HES years, we apply the same process when diaries are not supplied by all eligible members of the household. In addition, we impute age for respondents who do not provide an age. Before imputation was introduced, we discarded households where one or more questionnaire(s) were missing. With imputation, some of these households are recovered. Population weighting and benchmarks Population weighting and adjustments Weighting plays a vital role in estimation. We give each unit in the sample a weight that indicates the contribution of the sampled unit to the final population estimate. Weighting ensures that estimates reflect the sample design, adjusts for non-response to minimise the potential for nonresponse bias, and reduces sampling errors. For household surveys, deriving the weight is a multi-phase process. The first stage of the weighting involves calculating a unit s initial weight, which is dependent on the sample design and equals the inverse of the probability of selection. The second stage involves adjusting the initial weights to account for unit non-response. Unit non-response refers to a household that either provides no information, or the amount of information provided (and/or quality of) is insufficient to be regarded as a response. We reduce the initial weight of a non-responding unit to zero, while initial weights of responding units are scaled up accordingly by region and interview month. The final stage in the weighting process is integrated weighting. Integrated weighting also aligns estimates with externally sourced population, person, and household benchmarks and adjusts for under-counting of specific sub-population groups, such as young males and Māori. The population we used for the integrated weighting was benchmarked to estimates based on the 2006 Census. HES benchmarks The person benchmarks we use for HES are: regional population estimates; children subpopulation estimates by three age groups; adult sub-population estimates by sex and 13 age groups (including 75 years and over); and adult Māori sub-population estimates by two age groups (including 30 years and over). The household benchmarks are: two categories of household composition (two-adult households and non-two-adult households), and these categories further by regions. Population estimates are based on the 2006 Census of Population and Dwellings. 22
Under-reporting expenditure For some types of housing-cost expenditure, the estimated amount for all private households is less than expenditure reported from other data sources. There are three main reasons for this difference. We exclude expenditure by residents of non-private households, or by those ineligible for the survey (eg overseas visitors). Respondents to the survey forget or omit some types of purchases because they are unable to recall expenditure, or cannot refer to records at the time of the interview. A bias associated with non-response affects some statistics. We do not adjust the data to compensate for any under-reporting. HES does not collect rent payments made by businesses (including insurance companies). For example, if EQC or an insurance company is paying rent for a household we do not collect this information. This is of particular importance for data collected in Canterbury, where a greater number of earthquake-damaged households may still be having their rent paid by the EQC or an insurance company. Rent payments we collect in HES include rent from all private eligible households. This includes rent payments for council and state-owned dwellings. Comparing data with other HES years HES (Income) has a relatively small sample size (approximately 4,700 households). Although we adjust survey results for various demographic variables (age, sex, and region), there can be variability in survey estimates from one survey collection period to the next. This variability may be caused by the selection of a different group of households for each survey. Comparing full HES data with estimates in HES (Income) releases: data exclusions To make HES (Income) and full HES as comparable as possible, we exclude some expenditure data from full HES that is not collected in HES (Income) such as housing costs expenditure reported in the diaries and some insurance expenditure that is only collected in full HES years. In this 2013/14 release, as in the 2010/11 and 2011/12 HES (Income) releases, we revised expenditure figures from the previous full HES years (2006/07, 2009/10, and 2012/13) to exclude diary-sourced housing costs, and to adjust for the different level of details collected in the expenditure questionnaire in full HES. These adjustments are aimed at improving time-series comparability. Other differences between the surveys, including questionnaire structure, are not adjusted for. We have evidence that these structural differences (eg level of detail and length of questionnaire) are affecting the comparability of housing costs data between HES (Income) and full HES years. These differences particularly affect the mortgages and loans expenditure data, which are a significant component of total housing costs. For this reason, we only compare mortgages and loans, and total housing costs, in the current HES (Income) with previous HES (Income) years in the commentary. See Differences between the full HES and HES (Income) for more information on the differences between the surveys. 23
Using non-monetary indicator data The set of non-monetary indicator questions collects information on material standard of living. The questions are about ownership of certain essential items, affordability to do certain activities, and the extent to which people economise. We also ask respondents how they rate their overall life satisfaction. From this set of questions, we publish selected results for life satisfaction levels, and adequacy of income to meet everyday needs. We do not produce an index measurement of material wellbeing from this data. Other agencies use such data in conjunction with other measures (eg income, expenditure on housing costs, or household demographics), to give an indication of the material well-being of New Zealanders. Interpreting the data and confidentiality Interpreting the data The following factors need to be considered while interpreting data from this survey. A household s expenditure or income can be influenced by household size, household composition, geographic location, and employment-related factors. All income figures refer to gross (before tax) income, and housing-cost expenditure includes GST, where it applies. Our geographical breakdown into five broad regions is the lowest available for HES, due to the sample design. Confidentiality and suppression Data in this information release is suppressed if based on fewer than five people or households. Below this level there is a risk to respondents confidentiality or data would be unreliable. Data is also suppressed if they have a relative sample error of 51 percent or higher (21 percent for cross-tabulated data). Customised data The tables in this information release do not contain all possible analyses of HES (Income) data. We can customise data requests to users' specifications. More information See HES and HES (Income) for more information about HES. Statistics in this release have been produced in accordance with the Official Statistics System principles and protocols for producers of Tier 1 statistics for quality. They conform to the Statistics NZ Methodological Standard for Reporting of Data Quality. Liability While all care and diligence has been used in processing, analysing, and extracting data and information in this publication, Statistics NZ gives no warranty it is error-free and will not be liable for any loss or damage suffered by the use directly, or indirectly, of the information in this publication. 24
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Tables The following tables are available in Excel format from the Downloads box. If you have problems viewing the files, see Opening files and PDFs. 1. Average and median annual household income, by income source, for households receiving income from this source 2. Average and median annual household income, by income source, over all households 3. Average and median annual personal income, by income source, for people receiving income from this source 4. Average and median annual personal income, by income source, for all people 5. Housing costs to income ratios, by dwelling ownership 6. Housing costs to household income ratios, over all households, by region 7. Household expenditure on housing costs, by housing cost type, for households with that type of expenditure 8. Household material standard of living, by annual household income quintile 9. Household demographics, by annual household income decile 10. Personal demographics, by annual personal income decile Access more data on NZ.Stat Use NZ.Stat to access a range of time-series data from this release and previous HES releases. 27