RDP 2000-09: Consumption and Wealth Appendix A: Data Definitions and Sources

Alvin Tan and Graham Voss

December 2000

Australian data
Total consumption
Definition: Total household final consumption expenditure.
Units: $m (sa), in current prices.
Source: Australian National Accounts: National Income, Expenditure and Product, ABS Cat No 5206, Table 24.
Non-durables consumption
Definition: Total household final consumption expenditure less clothing and footwear, furnishings and purchases of vehicles.
Units: $m (sa), in current prices.
Source: Australian National Accounts: National Income, Expenditure and Product, ABS Cat No 5206, Table 24.
Total consumption deflator
Definition: Implicit price deflator for total household final consumption expenditure.
Units: 1997/98 = 100
Source: Australian National Accounts: National Income, Expenditure and Product, ABS Cat No 5206, Tables 24 and 25.
Non-durables consumption deflator
Definition: Implicit price deflator for total household final consumption expenditure less clothing and footwear, furnishings and purchases of vehicles.
Units: 1997/98 = 100
Source: Australian National Accounts: National Income, Expenditure and Product, ABS Cat No 5206, Tables 24 and 25.
Disposable income
Definition: Net disposable income for total households (gross less consumption of fixed capital).
Units: $m (sa), in current prices.
Source: Australian National Accounts: National Income, Expenditure and Product, ABS Cat No 5206, Table 23.

After-tax labour income

This series is constructed using data from a number of ABS publications. The principal difficulty is obtaining a measure of labour income that includes individuals that are not identified as wage and salary earners by the ABS (for example, small business owners). The following explains in detail how the series is constructed. Series available directly from the ABS are indicated.

After-tax labour income is defined as

WAGES are defined below. TRANSFERS are calculated as Total Secondary Income – Social Contributions for Workers Compensation. Both of these component series are available from ABS Cat No 5206, Table 23. We treat transfer payments, which are predominantly social benefit payments, as labour income. Since secondary income includes workers compensation claims, we deduct the contributions made by households.

γ is the share of labour income in total household income. It is calculated as WAGES/Total Primary Income. TAX is calculated as the sum of Income Tax Payable and Other Current Taxes on Income, Wealth etc. Except for WAGES, these series are also available from ABS Cat No 5206, Table 23.

WAGES is a quarterly wage bill measure constructed from Average Weekly Earnings and measures of employment as follows:[28]

where AWE is a measure of average weekly earnings, WSE is the total number of wage and salary earners and SCALE converts the wage bill for wage and salary earners to one for all employed individuals. ω is the number of weeks in a quarter, calculated as (1/7)×(365/4).

sj and AWEj are the share of total employment and average weekly earnings for the following groups: full-time females, part-time females, full-time males, and part-time males. The shares are calculated using data from The Labour Force Survey, ABS Cat No 6203, Table 5. Average weekly earnings for full-time males and females are available from Average Weekly Earnings, ABS Cat No 6302, Table 2. Part-time average weekly earnings are constructed by the RBA. We re-weight the reported average weekly earnings in this manner because the survey of businesses underlying the AWE is revised only quarterly and will not pick up new businesses in the quarter.

WSE is the total number of non-farm wage and salary earners. It is available from Australian National Accounts: National Income, Expenditure and Product, ABS Cat No 5206, Table 32.

SCALE is the ratio of aggregate hours worked by all individuals in the quarter, including those not identified as wage and salary earners by the ABS, to aggregate hours worked in the quarter by wage and salary earners. This is unpublished ABS data. By using this scale factor we are assuming that non-wage and salary earners have similar average weekly earnings to wage and salary earners.

Units: $m (sa), in current prices.
Source: Australian National Accounts: National Income, Expenditure and Product, ABS Cat No 5206, Table 23.
Financial wealth
Definition: Total household financial wealth.

Total household financial wealth includes household holdings of currency, bank deposits, building society deposits, credit co-op deposits, cash management trusts, public unit trusts, public common funds, friendly society holdings, government bonds, life office and super fund assets and direct holdings of equities, but excludes unfunded superannuation and prepayment of premiums.

Units: $m (nsa), in current prices.
Sources: Australian National Accounts: Financial Accounts, ABS Cat No 5232, Table 15 for data 1988:Q4 onwards. Data prior to 1988:Q4 are RBA estimates based on data from financial intermediaries that were collected by the RBA and ABS. Data are only available in quarterly data from 1988:Q4 onwards as data prior to this date are in annual data. Therefore, quarterly data prior to 1988:Q4 are interpolated from the annual data series. The financial accounts data from the ABS are of a better quality, as they are less reliant on estimates and are available quarterly.
Non-financial wealth
Definition: Total household non-financial wealth.

Household non-financial wealth consists of dwellings and durable goods. The measure for the value of dwellings is taken from the product of the estimated number of dwellings and the dwelling price index. The estimated number of dwellings is calculated using ABS data on completions and the census number of dwellings. The dwelling price index is constructed by using a weighted average of metropolitan and regional dwelling prices in each state, as reported by the CBA/HIA Housing report. The methodology for calculating the value of the dwelling stock is outlined in Callen (1991).

Units: $m (nsa), in current prices.
Sources: Census of Population and Housing, ABS Cat No 2015, Table B14, Building Activity, ABS Cat No 8752, Table 7A and CBA/HIA Housing Report.
Debt
Definition: Total household debt.

This measure consists of all financial institutional lending of personal credit, housing credit and securitised mortgaged lending.

Units: $m (sa), in current prices.
Source: Reserve Bank of Australia Bulletin, Tables B.16 and D.2.
Population
Definition: Estimated resident population of Australia.
Units: Thousands.
Source: Australian Demographic Statistics, ABS Cat No 3101, Table 4.

Net wealth measures

Calculation of net wealth and its components are as follows. Let aNFt, aFt and dt denote non-financial, financial wealth and debt. Then net wealth, wt, is wt = aNFt + aFt − dt. Net non-financial wealth wNFt and net-financial wealth wFt are then calculated as

Interest rates
Definition: 90-day bank bill rate (average of daily rates).
Source: Reserve Bank of Australia Bulletin, Table F.1.
US data

The implicit price deflator for personal consumption expenditure is used to deflate all US series. (Source: National Income and Product Accounts, Bureau of Economic Analysis, US Department of Commerce via Datastream, USCE…CE.) Per capita series are constructed from US population estimates (in ‘000s). (Source: Population Estimates Program, Population Division, US Census Bureau, Washington, DC 20233.)

US GDP (real per capita)
Definition: US GDP deflated by the implicit price deflator for personal consumption expenditure and US population figures.
Units: $m (sa), in 1996 prices.
Source: National Income and Product Accounts, Bureau of Economic Analysis, US Department of Commerce via Datastream, USGDP…B.
US net wealth (real per capita)
Definition: Net worth of US households and non-profit organisations.
Units: $m in 1996 prices.
Source: Flow of Funds Accounts of the United States, Federal Reserve Statistical Release, Table B100.
S&P 500 index (real)
Definition: S&P 500 index.
Units: 1996 prices.
Source: Standard and Poors, via Datastream, S&PCOMP.

Footnote

The Household Accounts of the National Income, Expenditure and Product accounts provide a measure of wage income, Compensation to Employees. This measure is not well suited for our purposes as it includes superannuation contributions by employers on behalf of employees. [28]