The ONS has been busy producing faster, more detailed statistics using new data sources. Providing clearer insights at the local level is an important aspect of this work. Ainslie Woods explains how our local income statistics compare and why they offer a complementary picture of local areas.
At the ONS we have continued to deliver our ambitious project to transform our sub-national statistics and produce more timely, granular and harmonised figures. In March we published gross disposable household income (GDHI) statistics broken down to very local areas for the first time, another major success for the project.
Today we have published an analysis article comparing our admin-based local income statistics to our official survey-based statistics.
But why are there three different local income statistics, and how do they relate to each other?
To help users understand the differences between them, and the wider income landscape, we have published updated coherence and comparison guidance, which is available as a related download alongside our existing Income and earning statistics guide.
The key differences between our local income statistics include the frameworks used to produce them, whether we’re measuring household, individual or household sector income and their geographic coverage.
The frameworks for income statistics
Income statistics can be produced according to different frameworks. A framework is essentially a set of internationally agreed standards used to produce statistics. The frameworks for income statistics are either a “micro-framework” or a “macro-framework”. Statistics using the micro-framework are collected for individual people or households and aggregated to the area of interest. These statistics are often very rich as they can contain detailed information about participants. Both the survey-based and admin-based local income statistics are produced according to this framework.
By contrast, the macro-framework is used to compile measures of economic activity. Statistics using the macro-framework are produced according to the internationally agreed System of National Accounts. These are compiled by the ONS at the UK level using a multitude of different sources, including household and business surveys, as well as administrative records. This includes our GDHI figures.
Individual and household income, or income of the households sector?
Micro-framework income statistics can either be published for individuals or households (and sometimes occupied addresses). Those living in residential institutions, such as prisons and care homes, are not included. The survey-based measure uses household income, whereas the admin-based measure uses individual and occupied address income.
On the other hand, GDHI figures (which are produced according to the macro-framework) measure the total income of the households sector. This is a concept within the System of National Accounts, which measures the total income of all people living in the UK, including those in residential institutions.
Geographic coverage
Statistics can be produced at many different levels of geography, covering different countries of the UK. There are specific small area geographies that are often used for reporting official statistics. Our admin-based local income statistics and GDHI statistics are available at a ‘statistical building block’ level (called a Lower layer Super Output Area), and many other higher aggregates.
However, our survey-based local income statistics are only available for a slightly larger small area geography (called a Middle layer Super Output Area). More information can be found on our Statistical geographies webpage.
There are several other differences between the local income statistics which are described further in the Coherence and comparison guidance for income statistics.
Conclusion
There are rich sets of income statistics for local areas, which we are continuing to develop and improve to meet user needs. Explaining the coherence and comparability of these statistics is fundamental to ensuring that they continue to serve the public good.
If you would like to get in touch, or have any suggestions for how we can further improve the coherence, or explain the nuances and differences, of income statistics, please email us at GSS.Income.Earnings@ons.gov.uk
Ainslie Woods is the income and earnings coherence lead at the Office for National Statistics