Field: Weighted mean of Net Household Housing Costs in year prices (weekly, equivalised, SPI-adjusted in nominal terms)

Description

Weighted mean of Net Household Housing Costs in year prices (weekly, equivalised SPI-adjusted in nominal terms), as reported by FRS respondents, where:

• weighted indicates that underlying sample of individuals in the Family Resources Survey (FRS) has been weighted or 'grossed up' to represent groups of individuals with certain characteristics in the whole population.
• mean of household housing costs is calculated by adding up household housing costs for each individual in the population and dividing the result by the number of people.
• the definition of a household used in the Family Resources Survey (FRS) is 'one person living alone or a group of people (not necessarily related) living at the same address who share cooking facilities and share a living room, sitting room, or dining area'. So, for example, a group of students with a shared living room would be counted as a single household even if they did not eat together, but a group of bed-sits at the same address would not be counted as a single household. A household may consist of one or more benefit units, which in turn will consist of one or more people (adults and children) - see Family Type for more information.
• housing costs:
• include:
• rent (gross of housing benefit);
• water rates, community water charges and council water charges;
• mortgage interest payments;
• structural insurance premiums;
• is equivalised: an adjustment is made to income to make it comparable across households of different size and composition.
• is SPI-adjusted: an adjustment is made to sample cases at the top of the income distribution to correct for under-reporting of earnings and volatility in the highest incomes captured in the survey.
• in year prices indicates income has not been adjusted for inflation so are in 'nominal' terms (to compare how housing costs are changing over time in real terms, please select the Measure: Household Housing Costs in latest prices).

Housing costs are calculated by subtracting net, weekly, equivalised, SPI-adjusted household income after housing costs from net, weekly, equivalised, SPI-adjusted household income before housing costs (see the Measures: Net Household Income (BHC) in year prices and Net Household Income (AHC) in year prices for more information).

HBAI estimates incorporate widely-used international standard measures of low income and inequality. The primary measure used in HBAI is equivalised disposable household income adjusted for household size and composition (through a process called equivalisation), estimated on both a before and after housing costs basis (BHC and AHC). Our main income measure includes contributions from earnings, state support, pensions, and investment income among others, and is net of tax.

HBAI uses this equivalised disposable household income as a proxy for living standards. A household is said to be in relative low income if their equivalised income is below 60 per cent of median income, while they are said to be in absolute low income if their equivalised income is below 60 per cent of the 2010/11 median income adjusted for inflation.

In line with international best practice, the income measures used in HBAI are subject to several statistical adjustments and, as such, are not always directly relatable to income amounts as they might be understood by people on a day-to-day basis. These adjustments, however, allow us to compare measures over time and across households of different sizes and compositions on a consistent basis.

HBAI uses variants of CPI inflation when estimating how incomes are changing in real terms over time.

Classification

Applicable to: All Individuals.

• Mean of net household housing costs in year prices.

Quality Statement

Further information can be found in the HBAI Quality and Methodology Report here.

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