A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
Treatment of Housing Costs in the UK Income Statistics
The measurement of housing costs is an important precursor to research in public policy and discussions on the consumption patterns of low-income individuals. This paper analyses the two primary housing-cost measurements currently used in the UK: before deduction of housing costs (BHC) and after deduction of housing costs (AHC). BHC treats housing-costs as on par with everyday expenditures, whereas AHC distinguishes between housing expenditures and other general consumption goods. UK and EU researchers have shown a preference for the BHC method, however this paper argues that a wider acceptance of AHC allows for a more accurate statistical understanding of housing costs. The BHC is limited by its assumptions that housing costs are a reflection of an individual’s chosen standard of living, while the AHC allows for adjustments such as regional price differences, life-cycle variations, and interest rate fluctuations. The paper also introduces alternative measures including imputed rent and decile-specific price indices that can be used to supplement BHC and AHC and produce more robust measures of housing costs.
Treatment of Housing Costs in the UK Income Statistics
The measurement of housing costs is an important precursor to research in public policy and discussions on the consumption patterns of low-income individuals. This paper analyses the two primary housing-cost measurements currently used in the UK: before deduction of housing costs (BHC) and after deduction of housing costs (AHC). BHC treats housing-costs as on par with everyday expenditures, whereas AHC distinguishes between housing expenditures and other general consumption goods. UK and EU researchers have shown a preference for the BHC method, however this paper argues that a wider acceptance of AHC allows for a more accurate statistical understanding of housing costs. The BHC is limited by its assumptions that housing costs are a reflection of an individual’s chosen standard of living, while the AHC allows for adjustments such as regional price differences, life-cycle variations, and interest rate fluctuations. The paper also introduces alternative measures including imputed rent and decile-specific price indices that can be used to supplement BHC and AHC and produce more robust measures of housing costs.
Treatment of Housing Costs in the UK Income Statistics
Mao, Amy Yizhi (author)
2012-01-01
The Public Sphere: Journal of Public Policy; Vol 1, No 1 (2012); 73-79 ; 2056-533X
Article (Journal)
Electronic Resource
English
DDC:
720
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