Income

Last Updated:

2011

Update Frequency:

Census every 5 years

Indicator Rationale

Economic wellbeing is a crucial element contributing to quality of life because most basic needs such as food, water, shelter, health care and many forms of recreation have to be purchased.

Data Source

Australian Bureau of Statistics 2006 Census, data available on request.

Measure

Median Equivalised Gross Weekly Household Income.

Equivalised household income can be viewed as an indicator of the economic resources available to a standardised household. For a lone person household it is equal to household income. For a household comprising more than one person, it is an indicator of the household income that would be needed by a lone person household to enjoy the same level of economic wellbeing.

It is derived by calculating an equivalence factor according to the 'modified OECD' equivalence scale, and then dividing total household income by the factor. The equivalence factor is built up by allocating points to each person in a household (1 point to the first adult, 0.5 points to each additional person who is 15 years and over, and 0.3 to each child under the age of 15) and then summing the equivalence points of all household members.

In the 2006 Census, information sufficient to determine their household income was not obtained from 11.1% of Victorian households (varying between 9.1% and 13.4% in individual LGAs). These households were excluded from the population prior to the calculation of the median.

Census Questions

The data have been derived from the Household Income census variable.

Household Income was derived from the responses of each household member aged 15 years and over to the Individual Income question (Question 33) on the 2006 Census form: What is the total of all wages/salaries, government benefits, pensions, allowances and other income the person usually receives?

Individual income was collected in ranges, so before these can be summed to a household level, a specific dollar amount needs to be imputed for each person. Median incomes for each range, derived using data from the 2003-04 Survey of Income and Housing, are used for this purpose. This method gives the best practical approximation that results in the majority of households being included in the same household income range (census output categories) as they would have had individuals reported their incomes in dollar amounts rather than in ranges.

The median income after equivalisation is based on an interpolation between the upper and lower bounds of the range containing the median household. This interpolation makes the assumption that households within the median range are evenly distributed along the range, so care should be exercised in the use of the derived median.

The imputation used in deriving household incomes is also likely to understate some household incomes - for lower household incomes in general, but particularly for single income households.

Reference