Much of the recent work on developing metrics to go “beyond GDP” has focused on non-monetary dimensions of people’s well-being, i.e. on their quality of life. However, there are also important limits to the available information needed to adequately measure economic well-being, understood as people’s command over resources or material living conditions. Understanding and improving people’s well-being requires improved evidence in both areas in order to better inform policy makers and citizens alike of where, when and for whom life is getting better or worse. This is particularly important at a time when the most severe and prolonged recession in our life time still imposes a large toll on the lives of many people across the world.

This Framework for Statistics on the Distribution of Household Income, Consumption and Wealth (ICW Framework) has been developed in response to a growing demand for statistics that measure economic well-being from a household, or micro, perspective. Household economic well-being is a reflection of the consumption of goods and services by households, and of the income and wealth that supports such consumption.

This publication presents an internationally agreed framework to support the joint analysis of micro-level statistics on household income, consumption and wealth. The publication aims to extend the existing international frameworks for measuring household income and consumption at the micro level to include wealth, and describes income, consumption and wealth as three separate but interrelated dimensions of people’s economic well-being.

This chapter describes the purpose of the Framework for Statistics on the Distribution of Household Income, Consumption and Wealth, or the ICW Framework, its relationship with other international frameworks, and the way in which it was developed. It concludes with an overview of the structure and contents of the rest of the publication.

This chapter provides a brief introduction to the concept of human well-being, with a particular emphasis on economic (or material) well-being. In doing so, it highlights the importance of considering income, consumption and wealth together as part of a conceptual framework. The chapter then goes on to explain the nature of the OECD framework for measuring human well-being, and the role of economic well-being within this framework. It concludes by setting out the broad policy, research and analytical objectives/uses of information collected in these fields.

This chapter outlines the main concepts used to describe and measure economic well-being at the micro-level, e.g. at the level of individuals and groups of individuals.

In the context of the ICW Framework, household income is a flow that enables consumption and contributes to changes in household wealth or net worth. As an important element in the measurement of economic well-being, standards and guidelines have been provided to assist countries in the collection, compilation and dissemination of household income statistics. The most recent of these, the 2011 Canberra Group Handbook, Second Edition, has been incorporated into the ICW Framework, and forms the basis for this chapter.

This chapter focuses on consumption as the basis of meeting needs. It presents the concepts and definitions associated with consumption, as well as ways to use the information and the methods for the collection, analysis and dissemination of data on consumption at the micro level.

This chapter reflects the Wealth Guidelines that were prepared in parallel with the development of this Framework. The Wealth Guidelines were developed to address the common conceptual, definitional and practical problems that countries face in producing such statistics, as well as to improve the comparability of the country data currently available. They were also developed to facilitate the integration of micro statistics on household wealth with those relating to other dimensions of economic well-being, such as income and consumption.

This chapter provides practical guidelines on the collection of integrated data on household income, consumption and wealth. The guidelines are intended to: Improve the harmonisation of these statistics, by reducing the impact of design and measurement effects on international comparability. Assist those countries considering the establishment of household surveys that concurrently collect information on income, consumption and wealth. Identify data requirements that are needed to improve the quality of data-matching in the fields of household income, consumption and wealth.

This chapter first shows the importance of considering life cycles when analysing data on income, consumption and wealth. It then provides an overview of selected tools that can be used for the integrated analysis of household income, consumption and wealth measures, as well as the use of equivalence scales in each dimension. The chapter then presents examples of the joint analysis of income and wealth data, and of income and consumption data, and then discusses some of the tools that could be used for the multi-dimensional analysis of all dimensions of economic well-being.

This chapter outlines the Expert Group’s expectations for how the ICW Framework might be used by countries in developing their micro data on household economic well-being, and provides suggestions for further international co-operation and statistical framework development.

As discussed in , income, consumption and wealth statistics comprise data on stocks and flows. Since the flows and stocks in the model balance by definition, the model can be viewed as an accounting framework with an income account, an expenditure account, a capital account, and balance sheets. In order for the accounts to balance, it is essential that the definitions of the various detailed components be consistent between the accounts, and that differences are clearly identified. A high degree of consistency is required when compiling and analysing integrated statistics on household income, consumption and wealth. Breakdowns of aggregates from the various dimensions should use consistent treatments and classifications so that data from one dimension can be related to data from another dimension. For example, data on income from investments should ideally use consistent and comparable breakdowns as wealth data relating to income-earning assets.

The main framework developed for analysis of income at the macro level is the System of National Accounts (SNA). explained that the micro and macro frameworks used to compile household income, consumption and wealth statistics have the same broad underlying concepts, but that there are differences reflecting the different purposes of the two types of data and the data sources used to compile them. B.1 provides a detailed element by element comparison of the definitions embodied in this Framework and those of the SNA.

There are overlaps and interrelationships between the terms social benefits, social assistance, social security, social insurance, pension schemes, annuities, life insurance, non-life insurance, accident insurance, term insurance and the like. The terms are not necessarily self-explanatory and are not always used consistently, especially when comparisons are made between countries with different institutional structures. The concepts underlying the terms are integral to some of the basic tools used by governments to assist those experiencing or likely to experience economic disadvantage, and by households to minimise their economic risks. It is essential to understand the concepts and employ a consistent terminology to describe them when undertaking micro analysis.