New SPC–World Bank guidance on imputation of housing rent in consumption aggregate

Aerial view of a neighbourhood, with houses, small roads and some vegetation (trees and plants). In the background, we can see the sea.

A new technical guide for poverty statisticians and welfare economists looks at methods to use household income and expenditure survey (HIES) data in estimating the value of rents, published by the Pacific Community (SPC) with World Bank support.

The fourth in a series of statistical methodological advice in the measurement of poverty and hardship, ‘Imputation of housing rent in consumption aggregate’ focuses on how to value housing use in measuring monetary wellbeing, poverty and inequality, developed by SPC’s Statistics for Development Division as part of the World Bank-financed PACSTAT initiative.

The guidance note focuses on methods to use HIES data to estimate the value of rents, an important component in a consumption aggregate used in monetary-based welfare measures, and is intended for a technical readership of statisticians, economists and others engaged in estimating household consumption in the Pacific.

It specifically focuses on methods in estimating rents. It includes a rationale, description of the various approaches to imputing rent, model decision-making, and the impact on poverty measurement when including or excluding rents in the consumption aggregate.

The guidance note shares recommendations of the Pacific Statistics Methods Board that aim to improve the quality and comparability of official statistics in Pacific Island countries and territories.

Poverty statistics in the Pacific region are underdeveloped, explains Ms Maria Musudroka, Manager of Statistics Collections with SPC.

“This note provides a practical reference—based on internationally recommended best practice—for poverty statisticians and welfare economists using HIES data to construct consumption aggregates,” she says.

“It fills a knowledge gap in Pacific-specific literature and is an important piece of the puzzle in improving the measurement of monetary-based welfare indicators.

“It also supports reporting against SDG [Sustainable Development Goals] Indicator 1.2.1 [proportion of population living below the national poverty line, by sex and age].”

The guidance note is fourth in a series to be produced under the World Bank-funded PACSTAT project—fostering statistical innovation and capacity-building in the Pacific Islands—with dissemination of best practice core to SPC’s work and role in the region across its scientific and technical domains.

The document was prepared by SPC consultant Dr Jean-Paul Zoyem, peer-reviewed by Statistics for Development Division staff and endorsed by the Pacific Statistics Methods Board.

Read guidance note: Imputation of housing rent in consumption aggregate