Understanding and improving data quality relating to low-income households. /

In this report the issues concerning the reliability of data and the implications for the measurement of inequality, poverty and social welfare are explored. There are both conceptual and practical issues of concern. The conceptual issues relate to the choice of the most appropriate unit of observation, period of observation, metric of measurement and source of data. The most natural unit of observation is the income unit, but since income units may share resources such as housing, the most practical unit is the household. Income data are generally available on both a current weekly basis and an annual basis. Some expenditure data are available on a current basis but lumpiness of expenditure in relation to durables and housing often mean that annual data will be the most reliable measure for small groups. There are enduring debates about the usefulness of concepts of poverty, relative and absolute; and of measures of inequality in describing the circumstances of people. There are also longstanding debates about the limitations of measurement relying on income and expenditure which are narrow measures of circumstance, and which ignore the benefits of in-kind provision of health, education and other services.