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Household Income and

Expenditure 2012 Household Budget Survey

BySanjev Bhonoo

18 November 2013

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Household Budget Survey 2012

• Survey on private non-institutional households conducted in

Mauritius and Rodrigues

• Period : January to December 2012

• 6720 households surveyed

• Main data items: income and expenditure

• Conducted every 5 years to take account of the changes in the

consumption pattern of the population (ILO recommendation)

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Objectives of the Household Budget Survey

• Determine the content of Consumer Price Index (CPI)

basket

• Estimate weight (importance) of each item in the basket

• Distribution of household income and expenditure

• Poverty analysis and other analyses

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CPI basket of goods and services

• The Consumer Price Index (CPI) is a measure of changes over time in the general level of prices of goods and services, which the private consumer buys

• The CPI basket is based on the expenditure pattern of households during a specific period

• The weight is the relative importance of each item in the basket with respect to the expenditure

CPI weight by major division 2001/02, 2006/07 and 2012

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Division Consumption expenditure group 2001/02 2006/07 2012

01 Food and non-alcoholic beverages 299 286 273

02 Alcoholic beverages and tobacco 86 92 96

03 Clothing and footwear 60 51 45

04 Housing, water, electricity, gas and other fuels 96 131 120

05Furnishings, household equipment and routine household maintenance

80 64 61

06 Health 28 30 40

07 Transport 139 147 151

08 Communication 31 36 39

09 Recreation and culture 53 48 44

10 Education 24 32 45

11 Restaurants and hotels 50 43 45

12 Miscellaneous goods and services 54 40 41

1,000 1,000 1,000 Total

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Major changes in weight by selected division 2001/02, 2006/07 & 2012

Food Furnishings, hh equip etc.

Transport Alc. Bev. & tobacco

Education Health0

50

100

150

200

250

300

350

299

80

139

86

24 28

286

64

147

92

32 30

273

61

151

96

45 40

2001/02 2006/07 2012

Major decreases

Major increases

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Increases

Electricity From 32 to 38

Mobile phone calls From 4 to 11

Internet connection From 2 to 11

University fees From 3 to 19

Prepared food From 16 to 24

Decreases

Bus fare From 26 to 11

Fixed telephone calls From 14 to 11

Newspaper From 9 to 4

Some item wise changes in weight, 2001/02 to 2012

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CPI basket’s weight – comparison with other countries

Description UK S. Africa Mauritius Malaysia Burundi

Food and non-alcoholic beverages 106 175 273 303 486

Alcoholic beverages and tobacco 44 54 96 22 80

Clothing and footwear 68 45 45 34 25Housing, water, electricity, gas and other fuels 137 228 120 226 155Furnishings, household equipment and routine household maintenance 59 52 61 41 49

Health 25 14 40 13 10

Transport 148 154 151 149 66

Communication 31 29 39 57 29

Recreation and culture 141 45 44 46 11

Education 21 27 45 14 13

Restaurants and hotels 117 34 45 32 36

Miscellaneous goods and services 103 143 41 63 40

Total 1000 1000 1000 1000 1000

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Household Disposable Income, 2012

• Avg. monthly household disposable income was Rs 29,360

• The average household size was 3.5

• There were 2 income earners per household

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Self em-ployment

15%

Property2%

Transfer14%

Paid em-ployment

70%

Household disposable income composition, 2012

• Income from paid employment is the major source of household income• Property income has a negligible share of total income

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Household Consumption Expenditure, 2012

• Average monthly household expenditure was Rs 23,930 in 2012

of which: Rs %

Food & non alcoholic beverages 6,540 27.3

Transport 3,630 15.2

Housing, water, electricity, gas and other fuels 2,860 12.0

Alcoholic beverages & tobacco 2,300 9.6

Education 1,080 4.5

Health 950 3.9

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Lowest decile

No. of income earners per household = 1.4

No. of persons working per household = 0.8

73% own their house & 21% had free accommodation

Household size : 3.3

Profile of households in lowest and highest income deciles, 2012

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Lowest decile

Monthly disposable income = Rs 7,200

Share of employment income = 41%

Share of transfer income = 43%

Profile of the households, 2012 (continued)

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Lowest decile

Monthly consumption expenditure = Rs 8,000

Share of food : 47%

Share of transport: : 6%

Share of education : 3%

Profile of the households, 2012 (continued)

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Income inequality, 2012• Gini coefficient = 0.413 (0 – complete equality, 1 – complete inequality)

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Gini coefficient - international comparisonSelected countries Latest available data

France 0.293

Australia 0.320

Japan 0.329

India 0.339

United Kingdom 0.342

United States 0.378

Thailand 0.394

Mauritius 0.413

Madagascar 0.441

China 0.474

Singapore 0.478

Botswana 0.610

South Africa 0.631

Seychelles 0.658

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Share of household income, 2012

Share of households (%) Share of total household income (%)

0102030405060708090

100

10.01.9

10.0

31.2HIGH-EST

LOWEST

The highest 10% of households received some 30% of the total income, while the lowest 10% of households received only some 2% of the total income

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Evolution of household income and expenditure, 2001/02 to 2012

2001/02 2012 % increase

Real increase (adjusted for inflation rate and change in hh size)

Annual growth

rateAvg. monthly household income (Rs)

14,230 29,360 106.3% 28.8% 6.8%

Avg. monthly household expenditure (Rs)

11,390 23,930 110.1% 31.1% 7.0%

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Distribution of household income, 2001/02 to 2012

2001/02 2006/07 2012

42.6 26.6 14.4

10,000 to < 20,000 38.1 41.8 30.0

20,000 to < 30,000 12.0 17.0 23.0

30,000 to < 40,000 4.0 6.8 12.1

40,000 to < 50,000 1.6 3.3 7.2

50,000 to < 60,000 0.7 1.6 4.7

60,000 to < 70,000 0.4 1.0 2.4

70,000 & above 0.6 1.9 6.2

100.0 100.0 100.0

Households (%)Monthly Household Disposable Income (Rs)

under 10,000

Total

• The graph for 2012 is more flattened compared to that of 2001/02 and 2006/07, indicating a spread in the income distribution

• The household deriving high income has increased, e.g., 13% of households had an average monthly income of Rs 50,000 or more in 2012 compared to only 2% ten years back

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Trends in income inequality - Gini coefficient, 2001/02 to 2012

2001/02 2006/07 2012

Gini coefficient 0.371 0.388 0.413

A higher Gini coefficient over the past 10 years indicates income inequality is on the rise

The further away the curve is from the equality line, the larger is the Gini coefficient, i.e. higher income inequality.

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Trends in income inequality - income share, 2001/02 to 2012

2001/02 2006/07 2012

Share (%) of total income going to :

Lowest 20% of households 6.4 6.1 5.4

Highest 20% of households 44.0 45.6 47.4

Ratio of highest 20% to lowest 20% 6.9 7.4 8.8

40

42

44

46

48

50

01/02 06/07 20125

5.5

6

6.5

7

01/02 06/07 2012

Income share for lowest 20% of households

Income share for highest 20% of households

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Thank you