Korea, Republic of

Title: Household Income and Expenditure Survey

GENERAL INFORMATION AND BASIC DEFINITIONS

1. Background

Further information is available from National Statistical Office of Government Complex Bld. #920, Dunsan-dong, So-gu, Taejon, 302-701, Republic of Korea, phone: +82 42 481 2264, fax: +82 42 481 2472, e-mail: isjeong@nso.go.kr.
Data have been collected by household survey since 1963.

2. Purpose and coverage

The following purposes are considered to be very important or of some importance:

• to obtain weights for consumer price index
• to estimate household expenditure for national accounts
• to study the general structure of household incomes/expenditures
• to study income/expenditure disparities among socio-economic groups
• to study consumer behaviour among socio-economic groups
• for general poverty and/or income distribution studies
• to study effects on income and expenditure of policy changes, especially tax changes
• for market research purposes

Lesser importance is attached to:

• to study income/expenditure patterns of disadvantaged groups, including pensioner households, single parent households, etc

Geographic coverage: National with the following geographic areas excluded: remote or inaccessible areas .

Population coverage:
The following types of household are included in the data collection:

• private households with more than one person
• armed forces residing in private housing outside military base

The following types of household are excluded in the data collection:

• one person private households
• those in collective housing (such as long term hospitals, prisons, monasteries, military quarters)
• non-resident households of nationals (households of nationals located abroad)
• diplomatic households in the country
• households of other foreigners in the country
• armed forces residing in private housing within military base

Units:
Dwelling units are used in the sample selection and are characterised by:

• single structure - detached housing unit
• single unit in a structure containing more than one housing unit
• multiple structures within a compound (e.g. huts)
• street address

Data are recorded for the household unit which is characterised by:

• two or more people living together:
  • sharing a single dwelling or compound
  • sharing meals
  • sharing a common budget for (at least) food and housing expenditures
  • pooling their income to some extent

Unit members: Usual residents temporarily living away from the dwelling are included, if away continuously for less than 15 days. Visitors (not usual residents) temporarily living in the dwelling are included, if staying continuously for more than 15 days. Domestic staff living in same dwelling/compound are included in the unit. Renters living in same dwelling/compound are not included in the unit. Boarders living in same dwelling/compound are not included in the unit.

Head of unit:
The concept of head of household/other unit is used in this survey and is characterised by:

• responsible for financial maintenance of household/unit
• main income earner
• responsible for decisions on main expenditures

3. Reference periods

The time period to which income and/or expenditure statistics refer when released/published is from 01/02 to 12/02. These data are collected in the period from 01/02 to 12/02. This survey is conducted continuously. The statistics are published quartely and annually.

SURVEY METHODOLOGY

4. Sample design

The Primary, Secondary and Ultimate Sampling Units are enumeration area/district, none and household respectively.

Stratification:
Areas/districts were stratified using the following criteria:

• geographical regions
• rural/urban
• administrative districts
• household type, industrial structure

The sampling frames for the Primary Sampling Unit (PSU) and Ultimate Sampling Unit (USU) were the list of Census enumeration areas and the master sample of households respectively. Primary Sampling Units (PSU) were selected using probability proportional to size and Ultimate Sampling Units (USU) were selected using two segments of five households per each are sel ected randomly. The sample size was 7500 households or other units and 6000 interviews. The overall response rate for the survey was 80 percent. Errors/biases were minimized by using an updated sampling frame.

Enumeration procedure: Enumeration uses a panel design in which each reporting unit is enumerated more than once. The sample is not divided into representative sub-samples. If a reporting household/unit drops out from the panel, yes, it is enumerated . If changes occur in composition of the reporting household/unit during the lifetime of the panel, then it is abandonned. ²

DATA COLLECTION, CONCEPTS, DEFINITIONS AND CLASSIFICATIONS

5. Income data

Income data are collected. Receipts do not have to be regular and recurring to be considered as income. Income includes receipts resulting from the sale or reduction of assets and/or from incurring liabilities are included in income. Income includes receipts that are not currently available to the unit.

The following receipts are collected separately:

• wages and salaries
• termination and redundancy payments
• employee social security contributions
• profit/loss from unincorporated enterprises (mixed income)
• goods produced for own consumption
• interest received
• dividends
• rentals (payment received for produced assets e.g. house)
• rents (payment received for un-produced assets e.g. land)
• retirement pensions from compulsory social security schemes

The following receipts are collected but not separately:

• cash bonuses and gratuities
• commissions and tips
• remuneration for time not worked, e.g. leave pay
• employee income in-kind provided free or subsidized: housing , excluded for other reasons
• employee income in-kind provided free or subsidized: meals
• employee income in-kind provided free or subsidized: car/transportation
• employee income in-kind provided free or subsidized: goods or services produced by employer
• employee income in-kind provided free or subsidized: other goods or services
• drawing for own use from unincorporated enterprises
• royalties
• regular pensions/annuities from schemes to which employee does not contribute
• old age benefits
• other pensions
• unemployment benefits
• family-related allowances
• sickness benefits
• invalidity benefits
• education-related allowances
• housing allowances
• survivors benefits
• free government dwelling
• subsidized government dwelling
• food subsidies
• medical reimbursements
• other social insurance benefits
• other social assistance benefits
• regular support received from non-profit institutions serving households: cash, e.g. scholarships
• regular support received from non-profit institutions serving households: goods and services
• regular support received from non-profit institutions serving households: free dwelling
• regular support received from non-profit institutions serving households: subsidized dwelling
• regular inter-household transfers received from: family, e.g. alimony, child/parental support
• regular inter-household transfers received from: regular inheritances or trusts
• regular inter-household transfers received from: regular cash gifts
• regular inter-household transfers received from: regular in-kind gifts
• regular inter-household transfers received from: free dwelling
• regular inter-household transfers received from: subsidized dwelling
• regular inter-household transfers received from: regular free services
• social transfers in kind: medical services
• social transfers in kind: public education
• social transfers in kind: transport subsidies
• social transfers in kind: cultural and recreational services
• social transfers in kind: others

The following receipts are not collected:

• employer social security contributions , excluded for other reasons
• services produced for own consumption , excluded due to measurement problems
• goods produced for barter , excluded due to measurement problems
• services produced for barter , excluded due to measurement problems
• stock consumed from unincorporated enterprise , excluded due to measurement problems
• services from owner-occupied dwellings , excluded due to measurement problems
• services from other consumer durables (net) , excluded due to measurement problems

The following receipts are classified as income from paid employment:

• wages and salaries
• cash bonuses and gratuities
• commissions and tips
• remuneration for time not worked, e.g. leave pay
• employee income in-kind provided free or subsidized: meals
• employee income in-kind provided free or subsidized: car/transportation
• employee income in-kind provided free or subsidized: goods or services produced by employer
• employee income in-kind provided free or subsidized: other goods or services

The following receipts are classified as income from self-employment:

• profit/loss from unincorporated enterprises (mixed income)
• drawing for own use from unincorporated enterprises
• goods produced for own consumption

The following receipts are classified as property income:

• interest received
• dividends
• rentals (payment received for produced assets e.g. house)
• rents (payment received for un-produced assets e.g. land)
• royalties

The following receipts are classified as transfer income but not employment-related:

• employee social security contributions
• regular pensions/annuities from schemes to which employee does not contribute
• retirement pensions from compulsory social security schemes
• old age benefits
• other pensions
• unemployment benefits
• family-related allowances
• sickness benefits
• invalidity benefits
• education-related allowances
• housing allowances
• survivors benefits
• free government dwelling
• subsidized government dwelling
• food subsidies
• medical reimbursements
• other social insurance benefits
• other social assistance benefits
• regular support received from non-profit institutions serving households: cash, e.g. scholarships
• regular support received from non-profit institutions serving households: goods and services
• regular support received from non-profit institutions serving households: free dwelling
• regular support received from non-profit institutions serving households: subsidized dwelling
• regular inter-household transfers received from: family, e.g. alimony, child/parental support
• regular inter-household transfers received from: regular inheritances or trusts
• regular inter-household transfers received from: regular cash gifts
• regular inter-household transfers received from: regular in-kind gifts
• regular inter-household transfers received from: free dwelling
• regular inter-household transfers received from: subsidized dwelling
• regular inter-household transfers received from: regular free services
• social transfers in kind: medical services
• social transfers in kind: public education
• social transfers in kind: transport subsidies
• social transfers in kind: cultural and recreational services
• social transfers in kind: others

The following receipts are classified as other income but not employment-related:

• termination and redundancy payments

The following receipts are excluded due to measurement problems:

• services produced for own consumption
• goods produced for barter
• services produced for barter
• stock consumed from unincorporated enterprise
• services from owner-occupied dwellings
• services from other consumer durables (net)

The following receipts are excluded for other reasons:

• employer social security contributions
• employee income in-kind provided free or subsidized: housing

The reference period for:

• wages and salaries
• cash bonuses and gratuities
• commissions and tips
• remuneration for time not worked, e.g. leave pay
• termination and redundancy payments
• employer social security contributions
• employee social security contributions
• employee income in-kind provided free or subsidized: housing
• employee income in-kind provided free or subsidized: meals
• employee income in-kind provided free or subsidized: car/transportation
• employee income in-kind provided free or subsidized: goods or services produced by employer
• employee income in-kind provided free or subsidized: other goods or services
• profit/loss from unincorporated enterprises (mixed income)
• drawing for own use from unincorporated enterprises
• goods produced for own consumption
• interest received
• dividends
• rentals (payment received for produced assets e.g. house)
• rents (payment received for un-produced assets e.g. land)
• royalties
• regular pensions/annuities from schemes to which employee does not contribute
• retirement pensions from compulsory social security schemes
• old age benefits
• other pensions
• unemployment benefits
• family-related allowances
• sickness benefits
• invalidity benefits
• education-related allowances
• housing allowances
• survivors benefits
• free government dwelling
• subsidized government dwelling
• food subsidies
• medical reimbursements
• other social insurance benefits
• other social assistance benefits
• regular support received from non-profit institutions serving households: cash, e.g. scholarships
• regular support received from non-profit institutions serving households: goods and services
• regular support received from non-profit institutions serving households: free dwelling
• regular support received from non-profit institutions serving households: subsidized dwelling
• regular inter-household transfers received from: family, e.g. alimony, child/parental support
• regular inter-household transfers received from: regular inheritances or trusts
• regular inter-household transfers received from: regular cash gifts
• regular inter-household transfers received from: regular in-kind gifts
• regular inter-household transfers received from: free dwelling
• regular inter-household transfers received from: subsidized dwelling
• regular inter-household transfers received from: regular free services
• social transfers in kind: medical services
• social transfers in kind: public education
• social transfers in kind: transport subsidies
• social transfers in kind: cultural and recreational services
• social transfers in kind: others

Income data were collected separately for each person receiving income. Components of income for an individual were collected from one person who reported for all individuals. Negative values (business losses) were excluded when computing self-employment income.

6. Expenditure data

Data collection method:
Diaries are used to collect expenditure data and are maintained for 3 years .

Diaries are used to collect expenditure on the following items:

• food
• alcohol, tobacco
• other household non-durables (such as newspapers, batteries)
• clothing, footwear
• other personal non-durables (such as perfumes)
• household services (such as plumber)
• personal services (such as driving lessons, haircuts)
• education, transportation and communication, hea lth cares

Interviews are not used to collect expenditure data.

Classification: A national classification that is not consistent with COICOP is used for classifying expenditure and has 262 separate categories at the finest level.³

7. Other Data Collection Issues

The following other topics are covered:⁴

• demographic characteristics
• education attainment of members
• housing characteristics
• savings
• indebtedness

Non-response: Non-response households (refusals and non-contacts) are substituted.

Non-response is reduced using the following measures:

• more than one repeat visits
• other incentives : gift

Reporting errors are reduced using the following measures:

• careful instrument design
• adequate cues or props for prompting
• quality control

DATA PROCESSING, ANALYSIS AND DISSEMINATION

Answers are not pre-coded on data collection forms, but are coded by the interviewers (data collectors).

Extreme values are deleted. In-kind receipts and consumption of own production are included in the estimates. In-kind receipts are valued using: the respondent's estimate. Consumption of own production is valued using: the respondent's estimate.

Treatment of owner-occupied housing: Values of owner-occupied housing are not included in the total income/expenditure estimates.

Treatment of selected groups/values in analysis: No households/units are excluded from analysis because of incomplete response. Missing values are imputed only on some occasions . Supplementary sources are not used to adjust estimates for under- or over-reporting. Etnic groups are excluded from data analysis.

Weighting:
Weighting factors are used to adjust for:

• sampling

Sampling errors: Sampling errors are computed for all aggregates and these sampling errors are published.

Tabulation and Analysis: Statistics are presented showing averages per month and statistics are analysed and tabulated for households only.

The following classifications are used for tabulation and analysis of income statistics:

• age of reference person or head of household
• sex of reference person or head of household
• occupation of reference person or head of household
• other characteristic of reference person or head of household
• income percentiles, quintile
• absolute income groups
• principal source of household income
• household size
• structure of household
• other characteristic of household
• other classification

The following classifications are used for tabulation and analysis of expenditure statistics:

• age of reference person or head of household
• sex of reference person or head of household
• occupation of reference person or head of household
• income percentiles, quintile
• absolute income groups
• principal source of household income
• household size
• structure of household
• other characteristic of household
• other classification

Documentation and Dissemination:
Published survey reports: Report on the Household Income and Expenditure, 2 month after each quarter, annually
Published methodological information: Annual report on the HIES, annually

Additional statistics (or special tables on request) are available for public use, with charges (files of unidentifiable unit data). Separate tables are not published for any special population groups. Files of unidentifiable unit data are available (or available on request) for public use, with charges.