﻿﻿ EU statistics on income and living conditions (EU-SILC) methodology - housing conditions - Statistics Explained

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

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 Housing conditions (ilc_lvho) 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 housing conditions are the following:

• Distribution of population along with different dimensions
• Average number of rooms per person
• Overcrowding rate
• Share of people living in under-occupied dwelling along with different dimensions
• Housing cost overburden rate
• Median of the housing cost burden distribution along with different dimensions

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 distribution of population along with the different combinations dimensions with which is disseminated, describes the population density in each (combination) of dimensions.
• The average number of rooms per person describes the weighted mean in the distribution of the number of rooms per ‘equivalent person’ living in the household.
• The overcrowding rate describes the proportion of people living in an overcrowded dwelling, as defined by the number of rooms available to the household, the household’s size, as well as its members’ ages and family situation.
• The share of people living in under-occupied dwellings along with the different combinations dimensions with which is disseminated, refers to the population living in a dwelling deemed to be too large for the needs of their household. Under-occupation is opposed to a situation of overcrowding. Under-occupation is defined on the basis of the number of rooms available to the household, the household’s size, as well as its members’ ages and family situation.
• Median of the housing cost burden distribution along with the different combinations dimensions with which is disseminated refers to the weighted median of the distribution of the share of total housing costs (net of housing allowances) in the total disposable household income (net of housing allowances) in each (combination) of dimensions.

### 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.

However, the overcrowding rate covers different subsets of the population, when accompanied along with different dimensions. More specifically, it covers the population aged 18 and over when broken down in the following dimensions: broad group of citizenship and broad group of country of birth. Additionally, part of the datasets presenting the overcrowding rate refers to the population without single people in the households. In this case, single person households are excluded from the reference population. In case, when computing the overcrowding rate, households and individuals with missing any of the components of overcrowding (see calculation method) or missing any of the dimensions are excluded.

The latter also holds, for the calculation of the share of people living in under-occupied dwellings, i.e. households and individuals with missing any of the components of under-occupation (see calculation method) or missing any of the dimensions are excluded.

With regard to the calculation of the housing cost overburden rate, all individuals living in private households are included, excluding those with missing values for equivalised disposable income and any of the dimensions. Additionally, the housing cost overburden rate covers the population aged 18 and over when broken down by broad group of citizenship and broad group of country of birth.

For the calculation of the median of the housing cost burden distribution, all households and individuals therein with missing equivalised disposable income (EQ_INC) or missing housing costs or missing any of the breakdown variables are excluded.

### Reference period

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 are disseminated 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, based on which the household type is also derived. The income reference period is a fixed 12-month period (such as the previous calendar or tax year) for all countries except the United Kingdom, for which the income reference period is the current year, and Ireland, for which the survey is continuous and income is collected for the last twelve months.

### Unit of measurement

All indicators presented are made available as a percentage, with the exception of the average number of rooms per person which is an (average) number.

### Dimensions

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

The distribution of the population is presented along with the following dimensions:

The average number of rooms per person is disseminated broken down by:

• tenure status and dwelling type
• type of household and income group (total, below 60% of median equalised income, above 60% of median equalised income)
• degree of urbanisation (DEGURBA)
• NUTS 2 region

The overcrowding rate is presented along with the following dimensions:

• age group, sex and poverty status (total, below 60% of median equalised income, above 60% of median equalised income)
• household type
• tenure status
• degree of urbanisation (DEGURBA)
• income quintile
• age group, sex and poverty status (total, below 60% of median equalised income, above 60% of median equalised income) (population without single-person households)
• income quintile (population without single-person households)
• age group, sex and broad group of citizenship (population aged 18 and over)
• age group, sex and broad group of country of birth (population aged 18 and over)

The share of the population living in under-occupied dwellings is given broken down by:

• age group, sex and poverty status (total, below 60% of median equalised income, above 60% of median equalised income)
• household type and income quintile
• tenure status
• degree of urbanisation (DEGURBA)

Housing cost overburden is disseminated along with the following dimensions:

• sex
• age group, sex and poverty status (total, below 60% of median equalised income, above 60% of median equalised income)
• income quintile
• tenure status
• degree of urbanisation (DEGURBA)
• household type
• age group, sex and broad group of citizenship (population aged 18 and over)
• age group, sex and broad group of country of birth (population aged 18 and over)

The median of the housing cost burden distribution is given broken down by:

• age group, sex and poverty status (total, below 60% of median equalised income, above 60% of median equalised income)
• degree of urbanisation (DEGURBA)

### Calculation method

1. Distribution of population along with the different combination of dimensions:

The algorithm calculates summary statistics (weighted sum of individuals/persons in households) for all possible combinations of dimensions (k).

Although the information on the housing characteristics refers to the household level, this indicator is defined at individual level, i.e. it has to be calculated by individual and not by household.

Individual weights based on Adjusted Cross-Sectional Weight (RB050a) are therefore used.

$Density\;rate_{i\_at\_k}=\frac{\sum\limits _{\forall i\_at\_k} RB050a_i}{\sum\limits _{\forall i} RB050a_i}\times 100$

With regard to the calculation of the distribution of population along with the different dimensions, the following methodological issues should be taken into consideration:

• While severe material deprivation is influenced by the local cost of living, the at-risk-of-poverty rate is set at the same level for an entire country. So the income of someone living in London is compared to the same threshold as that for someone living in rural Wales, although the cost of living is likely to be far higher in London. Furthermore, housing costs are not factored into disposable income. As housing costs tend to be higher in cities, and more people tend to rent in cities than in rural areas, it is likely that once income has been adjusted to take housing costs into account, a more accurate picture emerges. Other aspects of the cost of living, such as transport costs, also need to be factored in. Transport costs may be higher in rural areas, because of the need for a car, and longer trip distances than in urban areas, but the impact of these costs depends on income levels, as well as on the availability and cost of public transport

2. Average number of rooms per person:

Weighted average number of rooms (ANGEQP￼) per ‘equivalent person’ living in the household and in the respective dimensions (k), is calculated as weighted average of the ratio of the number of rooms available in the household (HH030) over the Effective household size (HHSIZE).

The weight variable used is the adjusted cross-sectional weight RB050a.

$ANGEQP_{at\_k}=\frac{\sum\limits _{\forall i\_at\_k} RB050a_i\times \frac{HH030_i}{HHSIZE_i}}{\sum\limits _{\forall i\_at\_k} RB050a_i}$

With regard to the calculation of the average number of rooms per person, the following methodological issues should be taken into consideration:

• A room is defined as a space of a housing unit of at least 4 square meters such as normal bedrooms, dining rooms, living rooms and habitable cellars and attics with a high over 2 meters and accessible from inside the unit.
• Kitchens are not counted unless the cooking facilities are in a room used for other purposes; only exclude it if space is used only for cooking. Thus, for example, the kitchen-cum-dining room is included as one room in the count of rooms.
• The following space of a housing unit does not count as rooms: bathrooms, toilets, corridors, utility rooms and lobbies. Verandas, lounges and conservatories do count only if they are used all year round.
• A room used solely for business use is excluded but is included if shared between private and business use.
• If the dwelling is shared by more than 1 household all rooms are counted for the owner/tenant except those exclusively used by the other households.
• Effective household size (HHSIZE) refers to the total number of persons in each household.

3. Overcrowding rate:

The indicator is computed by comparing for each individual of the population or a subset of the population, the total number of rooms available to the household (HH030) with this minimum number of rooms needed for the household. If HH030 for the respective house is below the minimum number of rooms needed, then the household is characterised as overcrowded. Although the information on the overcrowded dwelling refers to the household level, this indicator is defined at the individual level, i.e. it has to be calculated by individual and not by household.

Individual weights are therefore used and are based on the Adjusted Cross-Sectional Weight (RB050a).

$OVERCROWDING_{i\_at\_k}=\frac{\sum\limits _{\forall i\_where\_HH030<Number\_of\_Rooms\_Needed\_at\_k} RB050a_i}{\sum\limits _{\forall i} RB050a_i}\times 100$

where k denotes the respective dimensions.

With regard to the calculation of the overcrowding rate, the following methodological issues should be taken into consideration:

• The calculation includes single-person households (except for the cases where the indicator is computed for the total population excluding single -person households) and considers them as deprived if they live in a studio with bedroom not separated from the living room. This calculation based on the total population should systematically be used if the overcrowding criteria are analysed together with other housing quality criteria.
• Overcrowding is clearly higher among the poor after imputed rents are added to the income. The size of the dwelling and the estimated values of imputed rents are positively correlated — it is only to be expected that cash income poor who are able to afford to live in bigger dwellings are lifted above the new poverty risk threshold. Furthermore, some of the indebted owners are repositioned, by negative imputed rents due to high mortgage interests, under the new poverty risk threshold (i.e. when imputed rent is added to the income).

4. Share of population living in under-occupied dwellings along with the different combinations of dimensions:

The indicator is computed by comparing for each individual the total number of rooms available to the household (HH030) in terms of excess rooms and more specifically bedrooms. If HH030 for the respective house is above the minimum number of rooms needed, then the household is characterised as under-occupied. Although the information on the under-occupied dwelling refers to the household level, this indicator is defined at the individual level, i.e. it has to be calculated by individual and not by household.

Individual weights are therefore used and are based on the Adjusted Cross-Sectional Weight (RB050a).

$UNDER-OCCUPIED_{i\_at\_k}=\frac{\sum\limits _{\forall i\_where\_HH030>Number\_of\_Rooms\_Needed\_at\_k} RB050a_i}{\sum\limits _{\forall i} RB050a_i}\times 100$

where k denotes the respective dimensions.

With regard to the calculation of the share of the population living in a user-occupied dwelling, the following methodological issues should be taken into consideration:

• The calculation includes single-person households and considers them as deprived if they live in a studio with bedroom not separated from the living room. This calculation based on the total population should systematically be used if the overcrowding criteria are analysed together with other housing quality criteria.

5. Housing cost overburden rate:

The first step is to compute the household cost burden (HCB). HCB is defined as the ratio between the monthly total housing costs (HH070) multiplied by 12 and diminished by gross housing allowances (HY070G), and the annual disposable income (HY020) diminished by gross housing allowances following the formula:

$HCB=\frac{(HH070\times 12)-HY070G}{HY020-HY070G}\times 100$

The following conditions should be checked and applied:

1. (HH070x12) – HY070G ≤ 0 then HCB = 0

2. HY020 – HY070G ≤ 0 then HCB = 100

3. HY020 – HY070G < (HH070x12) – HY070G then HCB = 100

The HCB threshold was set at 40 % of the total disposable household income. Although all information used for its calculation refers to the household level, this indicator is defined at the individual level, i.e. HCB has to be calculated by an individual of the population or a subset of the population, and not by household.

Individual weights are therefore used and are based on the Adjusted Cross-Sectional Weight (RB050a).

$HH\_OVERBURDEN_{at\_k}=\frac{\sum\limits _{\forall i\_where\_HCB>40\%\_at\_k} RB050a_i}{\sum\limits _{\forall i\_where\_HCB>40\%}RB050a_i}\times 100$

With regard to the calculation of the housing cost overburden rate, the following methodological issues should be taken into consideration:

• Components that have been included in housing costs are gross of housing benefits (i.e. housing benefits should not be deducted from the total housing cost), regular maintenance and repairs and the cost of utilities (water, electricity, gas and heating) and in addition:
a) OWNERS: Mortgage interest payments (net of any tax relief), structural insurance, mandatory services and charges (sewage removal, refuse removal, etc.), taxes
b) TENANTS (at market price or at reduce price): Rent payments, structural insurance (if paid by the tenants), services and charges (sewage removal, refuse removal, etc.) (if paid by the tenants), taxes on dwelling (if applicable)
c) RENT FREE: gross of housing benefits (i.e. housing benefits should not be deducted from the total housing cost), structural insurance (if paid by the rent-free tenant), services and charges (sewage removal, refuse removal, etc.) (if paid by the rent-free tenant), taxes on dwelling (if applicable).
• Housing cost items not included in the rent but paid are, for example, the cost of the utilities, sewage removal, structural insurance, etc. a value has been imputed.
• Housing allowances are not fully comparable for all countries and discrepancies have been reported by a number of countries [1]

6. Median of the housing cost burden distribution along with the different combinations of dimensions:

The first step is to compute the household cost burden (HCB). Although all information used for its calculation refers to the household level, this indicator is defined at the individual level, i.e. HCB has to be calculated by individual and not by household.

Individual weights are therefore used and are based on the Adjusted Cross-Sectional Weight (RB050a).

The algorithm calculates the weighted median of the distribution of HCB for all individuals.

$HCB\_M_{at\_k}=\left\{\begin{matrix} \frac{1}{2}(HCB_{j\_at\_k}+HCB_{j+1\_at\_k}), \ if \ \sum\limits_{i=1}^{j} RB050a_i =\frac{1}{2} \sum\limits_{i=1}^{n} RB050a_i \\\ \\HCB_{j+1\_at\_k}, \ if \ \sum\limits_{i=1}^{j} RB050a_i < \frac{1}{2}\sum\limits_{i=1}^{n} RB050a_i <\sum\limits_{i=1}^{j+1} RB050a_i \end{matrix}\right.$

With regard to the calculation of the Median of the housing cost burden distribution along with the different combinations of dimensions, the following methodological issues should be taken into consideration:

• Components that have been included in housing costs are: the gross of housing benefits (i.e. housing benefits should not be deducted from the total housing cost), regular maintenance and repairs and the cost of utilities (water, electricity, gas and heating) and in addition:
a) OWNERS: Mortgage interest payments (net of any tax relief), structural insurance, mandatory services and charges (sewage removal, refuse removal, etc.), taxes
b) TENANTS (at market price or at reduce price): Rent payments, structural insurance (if paid by the tenants), services and charges (sewage removal, refuse removal, etc.) (if paid by the tenants), taxes on dwelling (if applicable)
c) RENT FREE: gross of housing benefits (i.e. housing benefits should not be deducted from the total housing cost), structural insurance (if paid by the rent-free tenant), services and charges (sewage removal, refuse removal, etc.) (if paid by the rent-free tenant), taxes on dwelling (if applicable).
• For housing cost items not included in the rent but paid are, for example, the utilities cost, sewage removal, structural insurance, etc. a value has been imputed.
• Housing allowances are not fully comparable for all countries and discrepancies have been reported by a number of countries.

Moreover, there are some methodological limitations that pertain to the following dimensions accompanying the indicator: Age, Activity status, Household type, Degree of urbanisation, Tenure status, Citizenship, Country of birth, Income quantile, NUTS region, Dwelling type

### Main concepts used

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

Additionally, the following concepts should be taken into consideration:

• Housing cost ('net' of housing allowances) refer to monthly costs connected with the households right to live in the accommodation. The costs of utilities (water, electricity, gas and heating) resulting from the actual use of the accommodation are also included.
• Housing allowances: The Housing Function refers to interventions by public authorities to help households meet the cost of housing. An essential criterion for defining the scope of a Housing allowance is the existence of a qualifying means-test for the benefit. It includes rent benefit and benefit to owner-occupier, while it excludes social housing policy organized through the fiscal system (i.e. tax benefits) and all capital transfers (in particular investment grants).

### SAS program files

The SAS programming routines developed for the computation of the EU-SILC housing conditions datasets along with the different dimensions are listed below.

Dataset SAS program file
Distribution of population by degree of urbanisation, dwelling type and income group (ilc_lvho01) _lvho01.sas
Distribution of population by tenure status, type of household and income group (ilc_lvho02) _lvho02.sas
Average number of rooms per person by tenure status and dwelling type from 2003 onwards (ilc_lvho03) _lvho03.sas
Average number of rooms per person by type of household and income group from 2003 (ilc_lvho04) _lvho04.sas
Average number of rooms per person by degree of urbanization (ilc_lvho04d) _lvho04d.sas
Average number of rooms per person by NUTS 2 region (ilc_lvho04n) _lvho04n.sas
Overcrowding rate by age, sex and poverty status - Total population (ilc_lvho05a) lvho05_06.sas
Overcrowding rate by household type - Total population (ilc_lvho05b) lvho05_06.sas
Overcrowding rate by tenure status - Total population (ilc_lvho05c) lvho05_06.sas
Overcrowding rate by degree of urbanisation - Total population (ilc_lvho05d) lvho05_06.sas
Overcrowding rate by income quintile - Total population (ilc_lvho05q) lvho05q_06q.sas
Overcrowding rate by age, sex and poverty status - Population without single-person households (ilc_lvho06) lvho05_06.sas
Overcrowding rate by income quintile - Population without single-person households (ilc_lvho06q) lvho05q_06q.sas
Overcrowding rate by age, sex and broad group of citizenship (total population aged 18 and over) (ilc_lvho15) lvho15.sas
Overcrowding rate by age, sex and broad group of country of birth (total population aged 18 and over) (ilc_lvho16) lvho16.sas
Share of people living in under-occupied dwellings by age, sex and poverty status - Total population (ilc_lvho50a) lvho50.sas
Share of people living in under-occupied dwellings by household type and income quintile - Total population (ilc_lvho50b) lvho50.sas
Share of people living in under-occupied dwellings by tenure status - Total population (ilc_lvho50c) lvho50.sas
Share of people living in under-occupied dwellings by degree of urbanisation - Total population (ilc_lvho50d) lvho50.sas
Housing cost overburden rate by age, sex and poverty status (ilc_lvho07a) lvho07.sas
Housing cost overburden rate by income quintile (ilc_lvho07b) lvho07.sas
Housing cost overburden rate by tenure status (ilc_lvho07c) lvho07.sas
Housing cost overburden rate by degree of urbanisation (ilc_lvho07d) lvho07.sas
Housing cost overburden rate by household type (ilc_lvho07e) lvho07.sas
Median of the housing cost burden distribution by age, sex and poverty status (ilc_lvho08a) lvho08.sas
Median of the housing cost burden distribution by degree of urbanisation (ilc_lvho08b) lvho08.sas
Housing cost overburden rate by age, sex and broad group of citizenship (total population aged 18 and over) (ilc_lvho25) lvho25.sas
Housing cost overburden rate by age, sex and broad group of country of birth (total population aged 18 and over) (ilc_lvho26) lvho26sas
Distribution of population by housing cost burden and sex (ilc_lvho27) _lvho27.sas
Distribution of population by housing cost burden and tenure status (ilc_lvho28) _lvho28.sas
Distribution of population by housing cost burden and degree of urbanisation (ilc_lvho29) _lvho29.sas
Distribution of population by housing cost burden and household type (ilc_lvho30) _lvho30.sas
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