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Standard of living measures

Stephen P. JenkinsInstitute for Social and Economic Research

Email: stephenj@essex.ac.uk

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The diversity of potential SoL measures:monetary & non-monetary

For example:1. money income (aggregated over a number of

income sources)2. ‘consumption’ – expenditures (aggregated over a

number of headings), and other indicators3. financial wealth and other assets4. multiple non-monetary indicators of deprivation or

hardship, and associated summary indices5. subjective measures of financial well-being,

satisfaction, and happiness SoL measures are used both as outcomes and

predictors

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SoL measures: current practice1. Household income: most commonly used measure, including

in official monitoring of poverty and living standards in UK, Europe and elsewhere – e.g. BHPS, ECHP, EU-SILC, PSID, SIPP, GSOEP, etc.

2. Consumption expenditure: emphasised by economists– few detailed comprehensive measures in longitudinal surveys (focus

of selected items, e.g. housing, food, durables)3. Wealth data

– detailed & regular for e.g. housing; fewer detailed and comprehensive, or regularly collected, measures

4. Material deprivation indicators: now supplementing UK and EU official monitoring– e.g. BHPS, ECHP

5. Subjective measures: growing interest– e.g. BHPS, GSOEP

No survey currently contains all measures

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Top-level issues

• What are the most important research questions to be addressed using SoL measures, now and potentially in the future?

• Which of the measures cited (or others) should receive priority?

• How important is continuity of measurement relative to the existing BHPS, and comparability with other UK national surveys?

• To what extent is cross-national comparability an important consideration?

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Some common definitional issues• Optimal data collection frequency?– e.g. sub-annual, annual, less frequent

• Reference period?– e.g. current versus annual for income/expenditure

• How comprehensive a measure is really required?– e.g. specific aspects of total income/expenditure/wealth

versus aggregate itself– e.g. domain satisfactions versus overall happiness– e.g. which indicators of deprivation

• Which ‘unit(s)’ necessary for? – each adult? each individual? key persons? household?

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Various data collection issues

• Relative pay-offs to different methods of data collection? – e.g. face-to-face interviews versus telephone or web;– e.g. interviewer-derived versus self-completion; – e.g. non-traditional tools of data collection – e.g. use of proxy respondents

• Relative pay-offs to different levels of detail– e.g. exact amounts, grouped, unfolding bracket– e.g. number of categories in a deprivation indicator or

happiness measure