The Household Finance and Consumption Survey (HFCS) 2018 was published on 30 January 2020. Data within the publication were revised on 4th June 2020. These data revisions were due to the re-calibration of weights used in the estimation of HFCS statistics. Data within the publication were revised again on 16 May 2023. These data revisions were primarily due to the supplementing of survey data with the Central Credit Register, an administrative data source obtained by the CSO in 2021. All content relating to HFCS 2018, including the Electronic Publication text, graphs and tables, Infographic, Press Release and PxStat tables, now reflect the revised data. Details as to the extent and impact of these revisions on previously published data can be found in the HFCS 2018 Revisions Information Note.
Background
Income, Consumption (household spending on goods and services) and Wealth (ICW) are important components of economic well-being. Looking at different types of economic resources jointly (rather than in isolation) allows for a better understanding of the types of households that may be in distressed or advantaged conditions. For example, income poor, asset rich households may be able to utilise their wealth reserves to support spending on goods and services. The joint distribution of income and wealth gives a better understanding of economic well-being when compared to a focus on a single dimension of a household’s economic resources (e.g. income or wealth alone).
In addition to information on wealth, the HFCS survey also collects information on household gross income. Therefore, joint distributional analysis of income and wealth using HFCS data is possible. As a household’s size increases then the potential sources of income and wealth increase as does the consumption needs of the household. To account for differences in household size and composition, equivalised gross income and net wealth values were calculated for all HFCS respondents (please see background notes for a description of equivalisation methodology).
Joint Distribution of Income and Wealth in Ireland
Table 9.1 below represents the joint distribution of equivalised net wealth and gross income quintiles. If there was perfect correlation between wealth and income, then all individuals in a given wealth quintile would be in the same income quintile, e.g. the 20% of individuals in the bottom wealth quintile would also be in the bottom income quintile. Random allocation along the joint distribution would result in a value of 4% in each cell. Percentages greater than 4%, indicate that persons in a given quintile of wealth are more likely to be in the associated income quintile(s). For example, 8.2% of individuals are in both the bottom (first) wealth and income quintiles and 6.9% are in the both the bottom wealth and 2nd income quintiles. Therefore, individuals in the bottom wealth quintile are more likely to be in the bottom 2 income quintiles rather than in the three top income quintiles. In 2018 only 0.7% of individuals were in both the bottom wealth and the top (fifth) income quintile.
When we group individuals into three groups for income and wealth, the bottom 20%, the middle 60% and the top 20% of the distribution, 38.8% of individuals are in the middle 60% of both the income and wealth distribution. The same share of individuals are in the bottom wealth/bottom income quintiles and in the top wealth/top income quintiles (8.2% and 8.2% respectively). When we compare the median equivalised net wealth of these groups we can see that the values increase within the same wealth group along with income. For example, the median equivalised net wealth for those that are in both the top wealth and the bottom income quintiles is €326,100, whereas for individuals that are in both the top wealth and income quintiles the median value is €431,300 (see Table 9.2).
Analysis of the joint distribution of income and wealth for individuals living in elderly households shows differences between individuals in single elderly and 2 adult elderly households (where at least one of the adults is 65 or same percentage of individuals in single elderly households and in 2 adult households). Focusing on the top wealth quintile, almost half of elderly households (44.4% and 43.8% respectively) are in this quintile (see Table 9.3).
However, when we look at the income distribution within the top wealth quintile there are apparent differences. Only 8.0% of individuals that are in the top wealth quintile and live in 2 adult elderly households are also in the bottom income quintile, compared to almost one in three (33.4%) of individuals living in single elderly households (see Figure 9.1).
| X-axis label | Top 20% income | Middle 60% income | Bottom 20% income |
|---|---|---|---|
| 2 adults, at least 1 aged 65+ | 23.8 | 68.1 | 8 |
| 1 adult aged 65+ | 15.2 | 51.4 | 33.4 |
Focusing on the bottom wealth quintile, only 4.1% of individuals living in 2 adult elderly households are in this quintile, compared to 11.3% of individuals in single elderly households. Two in ten (17.0%) individuals in 2 adult elderly households that are in the bottom wealth quintile are also in bottom income quintile. This contrasts with persons living in single elderly households where more five in ten (52.1%) individuals who are in the bottom wealth quintile are also in the bottom income quintile (see Figure 9.2).
| X-axis label | Top 20% income | Middle 60% income | Bottom 20% income |
|---|---|---|---|
| 2 adults, at least 1 aged 65+ | 0 | 83 | 17 |
| 1 adult aged 65+ | 1.3 | 46.7 | 52.1 |
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