The challenge
Determining a lower bound of what is a reasonable amount of expenditure for a range of households across states and with different income levels.
The research
Based on the Australian Bureau of Statistics’ Household Expenditure Survey 2015-16 and adjusting for expenditure-specific inflation, median expenditure on basic necessities and 25th percentile expenditure on discretionary basic expenditures are estimated and predicted by household type, location and income category. These predictions are updated every quarter after the ABS makes its March, June, September and December quarter Consumer Price Index available.
The impact
Providing an independent estimate of a reasonable lower bound to be expected on expenditure for a range of households with different income levels across states and in metropolitan versus non-metropolitan areas. This can then be used by banks and other financial institution as a benchmark to compare the reported expenditure of a loan applicant against.
Quarterly Household Expenditure Measure (HEM) report updates are available with a subscription via Perpetual Limited. For more information, please contact Nigel McCook - Nigel.McCook@Perpetual.Com.Au.
Our researchers
Melbourne Institute - Barbara Broadway, Guyonne Kalb.