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Household Economic Survey (Income): Year ended June 2011
Embargoed until 10:45am  –  25 November 2011
Data quality

Period-specific information 
This section contains data information that has changed since the last information release.

General information
This section contains information about data that does not generally change between releases.

Period-specific information

Comparing expenditure data over time

In this release, expenditure figures for 2006/07 and 2009/10 have been revised to exclude items such as diary-sourced housing costs, and to adjust for the different level of detail collected in the expenditure questionnaire between full Household Economic Survey years and HES (Income) years. These adjustments account for some differences between the way data is collected in the two versions of the survey, and improve time series comparability.

Other differences between the surveys, including questionnaire structure, are not adjusted for. There is evidence that these may affect the comparability of mortgages and loan expenditure data between full HES and HES (Income) years. These differences particularly affect the comparability of total housing cost figures, of which mortgages are a significant part. For this reason, mortgages and loans and total housing costs for HES (Income) are only compared with previous HES (Income) years in the commentary for this release.

See Differences between the full HES and HES (Income) for more information on the differences between the surveys.  

External influences

Data in this release was collected between 1 July 2010 and 30 June 2011.

Changes in income or expenditure may be influenced by one-off events. Events that could have influenced the HES (Income) 2010/11 data include:

  • increase in the adult minimum wage from $12.75 to $13.00, which came into effect on 1 April 2011
  • increases in Government transfer maximum rates of 3.75 percent for main benefits, which came into effect on 1 April 2011
  • increases in New Zealand Superannuation after-tax rates totallng 6.85 percent, which came into effect in two stages (October 2010 and April 2011)
  • changes in personal tax rates, which came into effect on 1 October 2010
  • increase in goods and services tax to 15 percent, which came into effect on 1 October 2010.

Impact of the Canterbury earthquake on the survey estimates

The damage following the earthquakes in Canterbury on 4 September 2010 and 22 February 2011 resulted in some disruption to interviewing for HES (Income). A small number of households in Christchurch were excluded from interviewing. We managed the loss of these households through the survey's usual adjustment methods for non-response. After investigating the effect of excluding these households we found that any difference in the Canterbury and New Zealand estimates was well within the sampling error bounds. As HES (Income) was in the field for the whole year, the decision was made to not make any adjustments to Canterbury or national estimates.

Changes to Auckland and Waikato regions

On 1 November 2010, the new Auckland Council replaced the existing councils of Rodney district, North Shore city, Auckland city, Waitakere city, Manukau city, Papakura district, and part of Franklin district.

The former Auckland Regional Council was amalgamated into the new Auckland Council. This resulted in a minor change to the boundary between Auckland and Waikato regions.

The statistics for HES (Income) 2010/11 are produced using the new boundaries. The new boundaries do not significantly affect measures in HES (Income). 

Changes to the questionnaires

Minor changes were made to the questionnaires to account for real-world changes since 2009/10, such as the way benefits are paid. See Household Economic Survey 2010/11 flowcharts for the latest questionnaires. For details of the differences between full HES and HES (Income) see Differences between full HES and HES (Income).

Response rate to the HES (Income) 2010/11 

The target response rate for HES (Income) is 75 percent of eligible respondents. The achieved response rate for the year ended June 2011 was 81 percent.

The response rate is calculated by determining the weighted number of eligible individuals who responded to the survey as a proportion of the estimated weighted number of total eligible individuals in the sample.

Imputation for HES (Income) 2010/11

Imputation replaces missing values with actual values from similar respondents. For more information see imputation.

The table shows the effect of imputation for the 2010/11 survey.  

 Number of individuals before and after imputation
 Year ended June 2011  

Number of people aged 15+

 Eligible individuals pre-imputation

 6,631

 Individuals imputed

   162

 Recovered records

   240

 Eligible individuals post-imputation

 7,033

As a result of recovering and imputing records, the response rate for the year ending 30 June 2011 improved from 78 percent to 81 percent.  

Sampling errors

The tables below summarise the sampling errors for 2008/09, 2009/10, and 2010/11, by income source and housing cost type. The tables indicate the variability of the estimates for the three samples.

Care should be taken 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
Years ended June 2009, 2010, and 2011
 Income source Level sampling error (%)

2008/09

2009/10 

2010/11

 Wage and salaries

4

  5

 4

 Self-employment

 29

 41

 35

 Investments

 22

 16

 22

 Private superannuation

 27

 41

 27

 New Zealand Superannuation and war pensions

 3

 4

 3

 Other government benefits

 10

 10

 8

 Other sources

 29

 26

 33

 Total regular income

 4

 4

 4

Sampling errors for average weekly household expenditure, by housing cost type (for households with expenditure from that source)

Years ended June 2009, 2010, and 2011

Expenditure item

Level sampling error (%)
2008/09 2009/10(1)  2010/11
Property and ground rent

 5

 4 5
Other payments connected with renting  21  18  22
Total rent payments  4  5  5
Mortgage principal repayments  14  11  9
Mortgage interest payments  7  7 7
Application and service fees for mortgages          39  27 32

Total mortgage payments

 8

 7

 6

Property rates  4  3 3
Building-related insurance 5 7 4
Other housing costs 32 53 25
Total housing costs 5 5 4

(1)Diary expenditure excluded from sample error calculations to improve comparability between full HES and HES (Income)

More detailed sampling errors are available by contacting info@stats.govt.nz

General information

Scope of the survey

As with the full HES, the target population for HES (Income) is the usually resident population of New Zealand residents living in private dwellings aged 15 years and over. This population does not include:

  • overseas visitors who expect to be resident 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
  • people living on offshore islands (excluding Waiheke Island)
  • members of the non-New Zealand armed forces
  • overseas diplomats.

Household Economic Survey (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
  • an economic living standards index (ELSI) short-form questionnaire for one member of the household who is 18 years and over (chosen randomly).

This survey uses computer-assisted interviewing, first introduced in the 2006/07 interview period. The survey questionnaires are available on our website.

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 rural and urban areas throughout the North and South Islands.

The HES (Income) sample has approximately 4,700 private households. Information is obtained for each member of sampled households that fall within the scope of the survey and meet survey coverage rules.

Reliability of the 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. Statistics New Zealand endeavours to minimise the impact of these errors by applying best practice survey methods and monitoring known indicators (eg non-response).

Proxy

A proxy may 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 the questionnaires are administered
  • 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 replaces missing values with actual values from similar respondents. A hierarchical hot-deck method is used to identify donors, with the donor's income questionnaire (and diary in full HES years) replacing that of the non-respondent.

Imputation was introduced into HES in 2009/10, and is used in all subsequent full HES and HES (Income) releases. It was also applied to data for 2006/07 (HES) and 2007/08 and 2008/09 (HES (Income)). 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 adult in the household has a fully completed income questionnaire, other household members without fully completed income questionnaire(s) have their income questionnaire(s) imputed. We apply the same process when diaries are not supplied by all eligible members of the household (in full HES years). In addition, respondents who do not provide an age have their age imputed.

Before imputation was introduced, households where one or more questionnaire(s) were missing were discarded. With imputation, some of these households are recovered. 

Population weighting adjustments

The population weighting used for the full HES and HES (Income) is integrated weighting. This statistical method adjusts the output to match externally sourced population benchmarks. In particular, it takes account of undercoverage in the survey for specific population groups such as young males and Māori.

The key benefits of using integrated weighting are: 

  • improving the robustness and accuracy of the survey estimates
  • reducing the effect of bias in estimates resulting from undercoverage
  • decreasing the level of sampling error for benchmark variables. 

The population used for the integrated weighting was benchmarked to estimates based on the 2006 Census. 

Under-reporting of 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.

  • Expenditure by residents of non-private households, or by those ineligible for the survey (eg overseas visitors), is excluded from this survey.
  • 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.

No adjustments are made to the data to compensate for any under-reporting.

Consistency with other periods

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 is because a different group of households is selected for each survey. 

Interpreting the data 

Factors influencing a household's expenditure or income include 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.

The five broad regions reported on are based on the regional council areas of Auckland, Wellington, and Canterbury, and the combined regions of ‘Rest of the North Island’, and ‘Rest of the South Island’. This level of geographical breakdown is the lowest available for HES (Income) due to the sample design. 

Data excluded from full HES estimates in HES (Income) releases

To make HES (Income) and full HES as comparable as possible, some expenditure that is not collected in HES (Income), such as diary sourced expenditure, is excluded from the full HES years of 2006/07 and 2009/10 when these are referenced in HES (Income) releases.

In addition to excluding diary expenditure, there is also a small amount of insurance expenditure that is only collected in full HES years that is assigned to an expenditure code used by HES (Income). To further increase comparability of the two surveys, starting with the 2010/11 release, this expenditure is now also excluded when comparing housing costs between years.

Other differences between the surveys, including questionnaire structure, are not adjusted for. For further detail see Comparing expenditure data over time.   

Recall period

Most of the housing cost expenditure is collected as 'latest payment' – meaning the amount most recently spent on this item. However, for some housing costs, respondents are asked about their spending for 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 covers a two-year period – ie one year back from 1 July 2010 for households interviewed in that month, through to 30 June 2011 for households interviewed then.

For information on income, each household member aged 15 years and over is asked about their income in 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. 

Figure, Recall period 

Using material standard of living data

The economic living standards index (ELSI) (short-form version) questionnaire collects information on material standard of living. ELSI asks questions about ownership of particular items (eg a good pair of shoes), or doing certain activities (eg a visit to hairdresser), social participation, and the extent that people engage in cost-related economising. Respondents are also asked how they rate their standard of living.

From the ELSI questionnaire we publish selected results for ratings, satisfaction levels, and adequacy of income to meet everyday needs. Statistics NZ does not produce an index measurement of economic standard of living from this data. Other agencies can use such index data in conjunction with other measures (eg income, expenditure on housing costs, or household demographics), to give an indication of the material standard of living of New Zealanders, however Statistics NZ does not do this.

Some components of the ELSI (short-form) questionnaire can be compared over time (eg adequacy of income to meet everyday needs). However, as judgements in level of satisfaction rise or fall in response to changes in aspirations over time, there can be an increase or decrease in ratings of material standard of living, so time series comparisons are not recommended. 

Suppressed estimates

Data in the information release are suppressed if based on fewer than five people or households. Data are 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 of the possible analyses of HES (Income) data. Data requests can be customised to users' specifications. Please contact info@stats.govt.nz for more information.

More information

For more information about HES, see HES and HES (Income) on the Statistics NZ website.

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.

Timing

Timed statistical releases are delivered using postal and electronic services provided by third parties. Delivery of these releases may be delayed by circumstances outside the control of Statistics NZ. Statistics NZ accepts no responsibility for any such delays.

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