CSB Working Paper, 2008, 1: The Inclusion of Non-cash Housing Advantages in the Income Concept. Estimates and Distribution Effects for Belgium

As pointed out by the Expert Group on Household Income Statistics (Canberra Group, 2001), the way in which is dealt with the income value of home ownership is crucial for distribution analyses. Home-ownership can have a large impact on a household’s expenditure structure. Because of the large proportion of home-owners in Belgium, a serious attempt to estimate the economic well-being of households should take the non-cash advantage derived of home-ownership, the so-called ‘imputed rent’ into acco…

As pointed out by the Expert Group on Household Income Statistics (Canberra Group, 2001), the way in which is dealt with the income value of home ownership is crucial for distribution analyses. Home-ownership can have a large impact on a household’s expenditure structure. Because of the large proportion of home-owners in Belgium, a serious attempt to estimate the economic well-being of households should take the non-cash advantage derived of home-ownership, the so-called ‘imputed rent’ into account. Also tenants who benefit from below-market rent or rent-free accommodation can be considered as beneficiaries of imputed rent. In this paper we explore different techniques to estimate imputed rent for Belgium, based on the methodology presented by Frick & Grabka (2003). We apply two methods for estimating imputed rent, namely 1) the selfassessment approach, and 2) the opportunity cost approach. Calculations are performed on the micro-data of the Belgian EU-SILC of the survey year 2004 (with income data referring to 2003). These estimates allow us to assess the distribution effect of including imputed rent in the income concept.