Note: this paper was formerly known as 6525.0 - Experimental Estimates of Imputed Rent, Australia, 2013-14.
This information paper presents a detailed explanation of the final methodologies implemented for estimates of imputed rent in the 2015–16 Survey of Income and Housing (SIH) and Household Expenditure Survey (HES). These include imputed rent estimates for owner-occupied dwellings and the imputed benefit to tenants not paying market rents.
The ABS first released experimental household level estimates of imputed rent for owner-occupied dwellings and other tenure types not paying market rents in May 2008, derived from data reported in the 2003–04 and 2005–06 Surveys of Income and Housing (SIH). The same methodologies were used for each subsequent SIH up to 2011–12. For the 2013–14 SIH, new experimental methodologies for estimating gross imputed rent were developed to address limitations of the previous methodologies. For the 2015–16 SIH, further refinements to the experimental methodologies were applied.
Estimates of imputed rent for 2003–04 to 2015–16 are presented in Household Income and Wealth, Australia, 2015–16 (cat. no. 6523.0). Estimates between 2003–04 and 2013–14 have been revised to be consistent with the new method outlined in this paper.
Household income statistics compiled for individual households are critical to analysis and modelling that supports understanding the socio-economic circumstances of different household types. They are also important in developing and evaluating policies on income support, income distribution and income taxation.
The ABS regularly collects detailed information on household income, expenditure and wealth in SIH and HES. SIH is conducted every two years, with the latest results published with respect to 2015–16. The HES is conducted every six years, with the latest survey relating to 2015–16. The SIH and HES were conducted on an integrated basis in 2003–04, 2009–10 and 2015–16.
The ABS releases summary statistics on household income in Household Income and Wealth, Australia (cat. no. 6523.0). Microdata from the surveys, such as the Confidentialised Unit Record Files (CURFs) and access to files via the DataLab (restricted to authorised users), are also available to users to support comprehensive and detailed analyses.
The most restricted concept of income used in income analysis is the gross private income of individuals. While this measure is useful for certain purposes, it is generally of limited use when trying to understand people’s broader economic wellbeing. Published ABS household income analysis, in accordance with international statistical standards, extends this income measure by:
- adding government transfers (both cash and in kind),
- deducting direct and indirect taxes,
- equivalising household income to adjust for household size, and
- adding an imputed rent value for the net benefits of home ownership and subsidised rent payments.
Imputed rent is included in both household income and expenditure. This conceptually treats owner-occupiers as if they were renting their home from themselves, thus simultaneously incurring rental expenditure and earning rental income.
Imputed rent is included in income on a net basis i.e. the imputed value of the services received less the value of the housing costs generally incurred by the household in their role as a landlord. Gross imputed rent is added to the expenditure of owner-occupiers, and any housing costs generally borne by a landlord are deducted (e.g. general and water rates, building insurance).
Including imputed rent in income for people living in different tenure types enables more meaningful analysis to be undertaken on their economic wellbeing and enables better analysis of changes over time in income levels and income distribution if tenures change. International standards for household income and expenditure statistics also recommend the inclusion of imputed rent to support different types of analyses.
International Conference of Labour Statisticians 2003, Final Report of the 17th International Conference of Labour Statisticians, Geneva, 24 November to 3 December 2003.
UNECE (2011), Canberra Group Handbook on Household Income Statistics, Second Edition, ECE/CES/11, Geneva.
System of National Accounts, 2008 (2008 SNA).