# EU statistics on income and living conditions (EU-SILC) methodology - economic strain

This article is part of a set of articles describing the methodology applied for the computation of the statistical indicators pertinent to the subject area of Economic strain (ilc_mdes) within the overall domain of Income and living conditions. For these indicators, the article provides a methodological and practical framework of reference. The indicators relevant to the subject area of economic strain concern the following:

• Inability to keep home adequately warm
• Inability to afford to pay for one-week annual holiday away from home
• Inability to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day
• Inability to face unexpected financial expenses
• Arrears (mortgage or rent, utility bills or hire purchase)
• Arrears on mortgage or rent payments
• Arrears on utility bills
• Arrears on hire purchase instalments or other loan payments
• Inability to make ends meet
• Inability to afford to get-together with friends or family (relatives) for a drink or meal at least once a month
• Inability to afford to participate in a leisure activity on regular basis
• Inability to afford to spend a small amount of money each week on yourself
• Inability to afford the use of public transport on regular basis

Moreover, since the indicators are of multidimensional structure and can be analysed simultaneously along several dimensions, the separate datasets providing these indicators along with the different combinations of dimensions are also presented.

### Description

• The inability to keep home adequately warm refers to the percentage of persons in the total population who are in the state of enforced inability to keep home adequately warm.
• The inability to afford paying for one-week annual holiday away from home refers to the percentage of persons in the total population who are in the state of enforced inability to afford to pay for one-week annual holiday away from home.
• The inability to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day refers to the percentage of persons in the total population who are in the state of enforced inability to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day.
• The inability to face unexpected financial expenses refers to the percentage of persons in the total population who are in the state of enforced inability to face unexpected financial expenses.
• The indicator on arrears (mortgage or rent, utility bills or hire purchase) refers to the percentage of persons in the total population who are in the state of arrears (mortgage or rent, utility bills or hire purchase), expressing the enforced inability to pay their mortgage or rent, utility bills or hire purchase on time due to financial difficulties.
• The indicator on arrears on mortgage or rent payments refers to the percentage of persons in the total population who are in the state of arrears on mortgage or rent payments, expressing the enforced inability to pay their mortgage or rent on time due to financial difficulties.
• The indicator on arrears on utility bills refers to the percentage of persons in the total population who are in the state of arrears on utility bills, expressing the enforced inability to pay their utility bills on time due to financial difficulties.
• The indicator on arrears on hire purchase instalments or other loan payments refers to the percentage of persons in the total population who are in the state of arrears on hire purchase instalments or other loan payments, expressing the enforced inability to pay for hire purchase instalments or other loan payments on time due to financial difficulties.
• The indicator on inability to make ends meet refers to the percentage of persons in the total population who are in the state of enforced inability to make ends meet, based on the following groups of the subjective non-monetary indicator ￼￼￼￼￼(SUBJNMON) defining the ability to make ends meet:
1. Households making ends meet with great difficulty (EM_GD)
2. Households making ends meet with difficulty (EM_D)
3. Households making ends meet with some difficulty (EM_SD)
4. Households making ends meet fairly easily (EM_FE)
5. Households making ends meet easily (EM_E)
6. Households making ends meet very easily (EM_VE)
• The indicator on inability to afford to get together with friends or family (relatives) for a drink or meal at least once a month refers to the percentage of persons in the total population who are not able to get-together for a drink/meal with friends or family at home or elsewhere e.g. restaurant, pub due to lack of financial means. Getting together with friends for professional matters only is excluded.
• The indicator on inability to afford to participate in a leisure activity on regular basis refers to the percentage of persons in the total population who cannot participate in activities such as sport, cinema, concerts, etc with regularity, due to financial difficulties. The activities taken into account in this indicator, are the ones that occur outside the home, in which the person needs to exert an expense, e.g. riding a bicycle, swimming lessons, entrance tickets.
• The indicator on inability to afford to spend a small amount of money each week on yourself refers to the percentage of persons in the total population who due to financial difficulties, are not able to freely spend money on themselves, e.g. to go to the movies, to buy a magazine, to buy an ice-cream, etc.
• The indicator on inability to afford to use public transport on regular basis refers to the percentage of persons in the total population who, due to financial difficulties, are not able to use the public transport with regularity. Public transport includes any form of transportation that charges set fares, runs fixed routes, and is available to the public, e.g. subway, bus, ferries, trains, etc.

### Statistical population

The statistical population consists of all persons living in private private households. Persons living in collective households and in institutions are generally excluded from the target population.

People with missing values for the variables:

• Ability to keep home adequately warm’ (EU-SILC - HH050),
• Capacity to afford to pay for one-week annual holiday away from home (EU-SILC - HS040)
• Capacity to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day (EU-SILC - HS050)
• Capacity to face unexpected financial expenses (EU-SILC - HS060)

or any of the variables related to arrears, i.e.:

• Arrears on mortgage or rent payments (EU-SILC - HS011), which has replaced the variable HS020 as defined in the EU-SILC Regulation from the 2008 operation onwards.[1]
• Arrears on utility bills (EU-SILC - HS021), which has replaced the variable HS020 as defined in the EU-SILC Regulation from the 2008 operation onwards. [2]
• Arrears on hire purchase instalments or other loan payments (EU-SILC - HS031), which has replaced the variable HS030 defined in the EU-SILC Regulation from the 2008 operation onwards. [3]

In any case, people with missing values for any of the different dimensions that the indicator is presented, are excluded from the calculation.

### Reference population

All indicators are collected and disseminated on an annual basis and refer to the survey year.

The reference period for all dimensions along with the indicators with which they are disseminated, as well as the variables each time in question, is the survey year, except for age, income and household type. As far as age is concerned, it refers to the age of the respondent at the end of the income reference period. Income reference period for income variables – with the exceptions of Ireland (moving income reference period) and the UK (survey year).

### Unit of measurement

All indicators presented are made available as a percentage.

### Dimensions

The separate datasets provide each indicator along with the Geopolitical entity and time dimensions and the dimensions presented below.

All indicators presented, relevant to the subject are of economic strain are disseminated broken down by household type and income group (total, below 60 % of equivalised income, above 60 % of equivalised income), except for the indicator on inability to make end meet which is provided broken down by household type, income group (total, below 60 % of equivalised income, above 60 % of equivalised income) and the subjective and non-monetary indicator of making ends meet (SUBJNMON).

### Calculation method

1. Inability to keep home adequately warm:

The indicator on inability to keep home adequately warm broken down by a combination of dimensions (k) $(HOME\_WARM_{at\_k})$ ￼is calculated as the percentage of people in each k who cannot afford to keep home adequately warm (HH050=2).

The weight variable used is the Adjusted Cross Sectional Weight (RB050a).

$HOME\_WARM_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HH050=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the inability to keep home adequately warm, the following methodological issue should be taken into consideration:

• This question is about affordability (ability to pay) to keep the home adequately warm, regardless of whether the household actually needs to keep it adequately

warm.

2. Inability to afford to pay for one-week annual holiday away from home:

The indicator on inability to afford paying for one week annual holiday away from home, broken down by a combination of dimensions (k) $(AFF\_HOLIDAY_{at\_k})$ ￼is calculated as the percentage of people in each k who cannot afford paying for one week annual holiday away from home (HS040=2).

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$AFF\_HOLIDAY_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HS040=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the inability to afford to pay for a one-week annual holiday away from home, the following methodological issues should be taken into consideration:

• The question focuses mainly on the affordability of some aspects of living standards. The wording of the question refers to the affordability and to the actual meaning "ability to pay" i.e. "the household has the resources to afford..." regardless of if the household wants it.
• If at least one household member cannot afford to go for holidays the answer should be “No” (e.g. in cases where parents can afford to send children to a summer camp but cannot afford to go for a holiday for themselves, or where a grown-up son or daughter can afford a holiday but other household members cannot).
• Please note that in cases wherein the household there are elderly members or members with health problems who have the resources to afford a week's annual holiday but for other reasons they cannot go or follow the other members of the household the answer should be "Yes".
• "Whole household" does not mean that the members of the household have to go all together and at the same time for holidays.
• If the household finances its holidays through borrowing (from bank, relatives or friends) it is considered in the same way as if the household manages to pay through own resources.

3. Inability to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day:

The inability to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day, broken down by a combination of dimensions (k) $(AFF\_MEAL_{at\_k})$ ￼is calculated as the percentage of people in each k who cannot afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day (HS050=2).

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$AFF\_MEAL_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HS050=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the inability to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day), the following methodological issues should be taken into consideration:

• This question assesses whether, according to the household respondent, the household can afford a meal with meat, chicken or fish (or equivalent vegetarian) every second day, regardless of if the household wants it.
• If the household manages to pay through borrowing (from bank, relatives or friends) it is considered in the same way as if the household manages to pay through own resources.

4. Inability to face unexpected financial expenses:

The inability to face unexpected financial expenses, broken down by a combination of dimensions (k) $(FACE\_EXP_{at\_k})$ ￼is calculated as the percentage of people in each k who cannot face unexpected financial expenses (HS060=2).

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$FACE\_EXP_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HH060=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the inability to face unexpected financial expenses, the following methodological issue should be taken into consideration:

• A required expense could be different across countries but examples are surgery, funeral, major repair in the house, replacement of durables like the washing machine, car.

5. Arrears (mortgage or rent, utility bills or hire purchase):

Arrears (mortgage or rent, utility bills or hire purchase) broken down by a combination of dimensions (k) $(ARREARS_{k})$ is calculated as the percentage of people in each dimension who are confronted with payment arrears for mortgage or rent, utility bills or hire purchase (HS011=1 or HS021=1 or HS031=1).

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$ARREARS_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HS011=1\;or\;HS021=1\;or\;HS031=1} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the indicators related to arrears (mortgage or rent, utility bills or hire purchase), the following methodological issue should be taken into consideration:

• The TF on Material deprivation recommended, starting from the 2008 operation, to slightly change the questions on arrears by adding one more category in the possible answers (YES/NO) that will distinguish between households that were in arrears once (YES-once) or twice or more (YES – twice or more) in the last twelve months.
• Living conditions Working Group agreed during its 2010 meeting to suppress HS010 and to keep only HS011 starting from the 2011 operation.
• Living conditions Working Group agreed during its 2010 meeting to suppress HS020 and to keep only HS021 starting from the 2011 operation.
• Living conditions Working Group agreed during its 2010 meeting to suppress HS030 and to keep only HS031 starting from the 2011 operation.

6. Arrears on mortgage or rent payments:

Arrears on mortgage or rent payments broken down by a combination of dimensions (k) $(ARREARS\_RENT_{at\_k})$ is calculated as the percentage of people in each dimension who are confronted with payment arrears for mortgage or rent payments (HS011=1).

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$ARREARS\_RENT_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HS011=1} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the indicators related to arrears on mortgage or rent payments, the following methodological issue should be taken into consideration:

• The TF on Material deprivation recommended, starting from the 2008 operation, to slightly change the questions on arrears by adding one more category in the possible answers (YES/NO) that will distinguish between households that were in arrears once (YES-once) or twice or more (YES – twice or more) in the last twelve months.
• Living conditions Working Group agreed during its 2010 meeting to suppress HS010 and to keep only HS011 starting from the 2011 operation.

7. Arrears on utility bills:

Arrears on utility bills broken down by a combination of dimensions (k) $ARREARS\_BILLS_{at\_k}$ is calculated as the percentage of people in each dimension who are confronted with payment arrears for utility bills (HS021=1).

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$ARREARS\_BILLS_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HS021=1} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the indicators related to arrears on utility bills, the following methodological issue should be taken into consideration:

• The TF on Material deprivation recommended, starting from the 2008 operation, to slightly change the questions on arrears by adding one more category in the possible answers (YES/NO) that will distinguish between households that were in arrears once (YES-once) or twice or more (YES – twice or more) in the last twelve months.
• Living conditions Working Group agreed during its 2010 meeting to suppress HS020 and to keep only HS021 starting from the 2011 operation.

8. Arrears on hire purchase instalments or other loan payments:

Arrears on hire purchase instalments or other loan payments broken down by a combination of dimensions (k) $(ARREARS\_INSTALL_{at\_k})$ is calculated as the percentage of people in each dimension who are confronted with payment arrears for hire purchase instalments or other loan payments (HS031=1).

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$ARREARS\_INSTALL_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_HS031=1} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

With regard to the calculation of the indicators related to arrears on hire purchase instalments or other loan payments, the following methodological issue should be taken into consideration:

• The TF on Material deprivation recommended, starting from the 2008 operation, to slightly change the questions on arrears by adding one more category in the possible answers (YES/NO) that will distinguish between households that were in arrears once (YES-once) or twice or more (YES – twice or more) in the last twelve months.
• Living conditions Working Group agreed during its 2010 meeting to suppress HS030 and to keep only HS031 starting from the 2011 operation.

9. Inability to make ends meet:

Let SUBJNMON be the subjective non-monetary indicator that describes the ability to make ends meet and is defined as the set of values from 1 to 6 according to the level of difficulty to make ends meet. The inability to make ends meet broken down by each combination of dimensions (k) $(ENDS\_MEETxx_{at\_k})$ is calculated as the percentage of people in each k who cannot afford to make ends meet for all levels of SUBJNMON.

The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$ENDS\_MEETxx_{at\_k}=\frac{\sum \limits _{\forall i\;where\;SUBJNMON=EM\_xx\_at\_k} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

where xx takes the values GD (great difficulty), D (difficulty), SD (some difficulty), FE (fairly easily), E (easily) and VE (very easily).

With regard to the calculation of the inability to make ends meet, the following methodological issues should be taken into consideration:

• The objective is to assess the respondent feeling about the level of difficulty experienced by the household in making ends meet.
• The usual necessary expenses of the household include housing-related costs but exclude business and farm work costs.
• Member States are requested to use the same scale proposed in the given order in order to guarantee the maximum comparability.

Moreover, there are some methodological limitations that pertain to the following dimensions accompanying the indicators: Household type, Subjective and non-monetary indicator of making ends meet

10. Inability to afford to get-together with friends or family (relatives) for a drink or meal at least once a month:

The inability to afford to get-together with friends or family (relatives) for a drink or meal at least once a month broken down by a combination of dimensions (k) $(AFF\_GETTOG_{at\_k})$ is calculated as the percentage of people in each k who are not able to get-together for a drink/meal with friends or family at home or elsewhere (due to financial difficulties)at least once a month (PD050=2). The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$AFF\_GETTOG_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_PD050=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

• This question assesses whether the respondents are financially able to meet up with other people in a social context and incur in an expense during this event. Regardless of desirability, i.e. if the respondent has the financial resources to meet up, even though he or she might prefer not to do so.

11.Inability to afford to participate in leisure activities on regular basis:

The inability to afford to regularly participate in a leisure activity broken down by a combination of dimensions (k) $(AFF\_LA_{at\_k})$ is calculated as the percentage of people in each k who are not able to participate in social activities that requires them to spend money, due to lack of financial limitations (PD060=2). The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$AFF\_LA_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_PD060=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

• This question assesses whether, according to the household respondent, he or she is financially able to participate in leisure activities e.g. being part of a sports team, going to festivals, movies, etc. The desirability aspect is excluded from this question, i.e. if the respondent has the possibility to incur in such expenses regardless of wanting to do so.

12. Inability to afford to spend a small amount of money on yourself on weekly basis:

The inability to afford to spend a small amount of money each week on themselves broken down by a combination of dimensions (k) $(AFF\_SMALLM_{at\_k})$ is calculated as the percentage of people in each k who are not able to spend (on weekly basis) a small quantity of money in something for their own enjoyment, e.g. in a magazine, a snack, a small book, etc. The reason being, that they cannot afford it (PD070=2). The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$AFF\_SMALLM_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_PD070=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

• This question assesses whether, according to the respondent, he or she is financially able to incur in a personal expense on weekly. The desirability aspect is excluded from this question, i.e. if the person is financially able to spend the money, regardless of wanting to do so.

14.Inability to afford to use public transport on regular basis:

The inability to afford to spend a small amount of money each week on themselves broken down by a combination of dimensions (k) $(AFF\_PTRANS_{at\_k})$ is calculated as the percentage of people in each k that cannot cope satisfactorily with the daily/regular travelling that they have to do using public transportation due to financial limitations, i.e. they consider the price of the ticket being too high (PD090=2).The weight variable used is the Adjusted Cross-Sectional Weight (RB050a).

$AFF\_PTRANS_{at\_k}=\frac{\sum \limits _{\forall i\_at\_k\_where\_PD090=2} RB050a_i} {\sum \limits _{\forall i\_at\_k} RB050a_i} \times 100$

• This indicator was collected for the first time in 2013, therefore no correspondence can be found with the previous module on Material Deprivation collected in 2009. Then, by 2015 it was discontinued.

### Main concepts used

For the production of the indicators relevant to the subject area of economic strain, the variables listed below are also involved in computations:

### SAS scripts

SAS programming routines developed for the computation of the EU-SILC datasets providing the indicators on economic strain along with the different dimensions are listed below.

Dataset SAS program file
Inability to keep home adequately warm (ilc_mdes01) _mdes01.sas
Inability to afford paying for one week annual holiday away from home (ilc_mdes02) _mdes02.sas
Inability to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day (ilc_mdes03) _mdes03.sas
Inability to face unexpected financial expenses (ilc_mdes04) _mdes04.sas
Arrears (mortgage or rent, utility bills or hire purchase) from 2003 onwards (ilc_mdes05) _mdes05.sas
Arrears on mortgage or rent payments (ilc_mdes06) _mdes06.sas
Arrears on utility bills (ilc_mdes07) _mdes07.sas
Arrears on hire purchase instalments or other loan payments (ilc_mdes08) _mdes08.sas
Inability to make ends meet (ilc_mdes09) _mdes09.sas
Persons who cannot afford to get-together with friends or family (relatives) for a drink or meal at least once a month by age, sex and income group (ilc_mdes10a) _mdes10.sas
Persons who cannot afford to get-together with friends or family (relatives) for a drink or meal at least once a month by employment status and income quintile (ilc_mdes10b) _mdes10.sas
Persons who cannot afford to regularly participate in a leisure activity by age, sex and income group (ilc_mdes11a) _mdes11.sas
Persons who cannot afford to regularly participate in a leisure activity by employment status and income quintile (ilc_mdes11b) _mdes11.sas
Persons who cannot afford to spend a small amount of money each week on themselves by age, sex and income group(ilc_mdes12a) _mdes12.sas
Persons who cannot afford to spend a small amount of money each week on themselves by employment status and income quintile (ilc_mdes12b) _mdes12.sas
Persons who cannot afford a regular use of public transport by age, sex and income group(ilc_mdes13a) _mdes13.sas
Persons who cannot afford a regular use of public transport by employment status and income quintile (ilc_mdes13b) _mdes13.sas
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• Living conditions and welfare (livcon), see:
Income and living conditions (ilc)
Material deprivation (ilc_md)
Economic strain (ilc_mdes)

### Notes

1. Living conditions Working Group agreed during its 2010 meeting to suppress HS010 and to keep only HS011 starting from the 2011 operation.
2. The Living conditions Working Group agreed during its 2010 meeting to suppress HS020 and to keep only HS021 starting from the 2011 operation.
3. The Living conditions Working Group agreed during its 2010 meeting to suppress HS030 and to keep only HS031 starting from the 2011 operation.