Households

Decile (decile group)

A decile group is one tenth of all households arranged by their incomes from minimum to maximum. The first decile group is the first one-tenth (the 10% of all household with lowest incomes). The last decile is the one-tenth of the households with the highest incomes. Not all households are consistently in the same decile group from one year to the next. For example, an employed household may move down from a higher decile in a particular year due to the temporary unemployment of a household member, before moving up the deciles when the member resumes employment in the subsequent year. In comparing the performance of any particular decile group over time, it is therefore relevant to note that the comparison may not pertain to the same group of households.

Equivalence Scales

Internationally, the computation methods adopted vary across countries, although the basic concept of the Gini coefficient remains the same. One major difference is in the equivalence scale adopted. Equivalence scales take into account economies of scale within the household, and adjust for household size so that households of different sizes and compositions are comparable. There are different scales used by different countries and international organisations.

The simplest method of adjusting for differences in household size is to divide household income by the number of members in the household, and present household income on a per household member basis. For example, a household of four having income from work of $4,000 would have $1,000 on a per member basis. There are more complex methods of adjusting for differences in household size. Commonly used equivalence scales include the modified Organisation of Economic Co-operation and Development (OECD) scale (used by Eurostat, the UK and Australia) and the square root scale (used by OECD in its reports).

The modified OECD scale assigns the first adult in the household a weight of 1 point, and each additional adult a weight of 0.5 points and each child a weight of 0.3 points. Equivalised household income is derived by dividing the total household income by the sum of the points allocated to the household members. For example, a household comprising two adults and two children would have a sum total of 2.1 points. If the household has income from work of $4,000, then the equivalised household income would be $1,905 (i.e. $4,000 divided by 2.1).

Another method is the square root scale, which is used by OECD in its major reports on income inequality. The square root scale divides household income by the square root of household size. For example, based on the square root scale, a household of four having income from work of $4,000 would have an equivalised household income of $2,000 (i.e. $4,000 divided by the square root of 4).

Expenditure

Refer to consumption expenditure incurred by households. Household consumption expenditure is the value of consumer goods and services acquired, used or paid for by a household for the satisfaction of the needs and wants of its members. Non-consumption expenditure such as loan repayments, income taxes, purchase of houses is excluded. The consumption expenditure on owner-occupied accommodation is estimated using the rental equivalence method, which measures the shelter cost in terms of the expected rental the owner would have to pay if he were a tenant of the premises. It is estimated based on the Annual Assessed Values (AAVs) provided by the Inland Revenue Authority of Singapore (IRAS). The imputed rental of owner-occupied accommodation is included when analysing the detailed share of household expenditure by goods and services.

Gini coefficient

A summary measure of income inequality. It is equal to zero in the case of total income equality and equal to one in the case of total inequality. The more unequal the income distribution, the larger the value of the Gini coefficient.

Household

A household refers to (i) a group of two or more persons living together in the same house and sharing common food or other essential arrangements for living; or (ii) a person living alone or a person living with others but having his own food or other essential arrangements for living. Although persons may be living in the same house, they may not be members of the same household.

Household income from work

Refers to the sum of income received by employed members of the household from employment and business. However, it does not include the income of domestic workers. Monthly household income from work includes one-twelfth of the annual bonus. Data on household income from work refer to household income from work before accounting for Government transfers and taxes, unless stated otherwise. As the income data pertain to income from work, the coverage of households is based on resident employed households. Data on household income are based on the sample of households surveyed in the June Comprehensive Labour Force Surveys conducted by the Ministry of Manpower every year, except for 2000, 2005, 2010 and 2020 which are based on the Censuses of Population and the mid-decade General Household Survey. The income estimates are based on income as reported by survey respondents and augmented with administrative data.

Household income from work per household member

Refers to the household income from work divided by the total number of members in the household. For example, if there is one person in a household of four who is employed, his income is divided by four to derive the income per household member. This takes into account the different sizes of households in each group and enables analysis of changes in household income, adjusted for changes in household size over time.

Household size

Refers to the total number of members in the household, including domestic workers.

Median Household income

Refers to the household income in the middle of the income distribution, i.e. half of the households have higher income than the median household income and half have lower income than the median household income.

Percentile ratio

A measure of the spread of incomes across the population. P90 refers to the income level at the 90th percentile. P10 refers to the income level at the 10th percentile.

Resident employed household

Refers to a resident household with at least one employed person.

Resident household

Refers to a household where the household reference person is a Singapore citizen or permanent resident.

Tenancy

Refers to the tenure status of the household with respect to the dwelling in which the household members live in. “Owner-Occupied” refers to a household where the household reference person and/or any other member(s) in the household owns the dwelling unit. This includes those which are fully paid-up as well as those with outstanding housing loans. “Rented” refers to a household where the household reference person and/or any other member(s) in the household rents whole or part of the dwelling unit.

Type of Goods and Services

Expenditure by the type of goods and services are classified according to the Singapore Classification of Individual Consumption according to purpose (SCOICOP). In line with the principles of the United Nations (UN) COICOP, the SCOICOP categorises consumption expenditures according to their primary “functions” or “purposes”. Broad divisions include:

  • "Food & Non-Alcoholic Beverages",
  • "Food Serving Services",
  • "Housing & Utilities",
  • "Health",
  • "Transport",
  • "Communication" etc.