Are older Australians being short changed?

An analysis of household living costs

• National Seniors Productive Ageing Centre

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Report image: Are older Australians being short changed?

22 November 2011In this report, the authors examine how well the consumer price index (CPI) measures inflation for the overall Australian community and how living cost pressures are being distributed throughout the population.

They focus mainly on older Australian households (those with the head aged 50 years and over) as many of these households are on low incomes, and spend a large proportion of their budget on essential living cost (“non-discretionary”) items.

Methodology
This report uses two sources of data: inflation data over the five-year period from June 2006 to June 2011 and individual household expenditure data from 2006 to 2009. The inflation analysis uses data from the Consumer Price Index produced by the Australian Bureau of Statistics (ABS, 2011b) and individual household expenditure estimated from the HILDA survey by the Melbourne Institute.

HILDA is the Household, Income and Labour Dynamics in Australia survey and has been tracking the same people and households every year since 2001. Each wave of the survey covers a range of subjects including questions on employment, income and expenditure. The questions about income and expenditure in wave 6 (2006) and wave 9 (2009) are used in this report to establish the levels and patterns in expenditure.

In this report, the age of the household is defined based on one person in the household. The selection of this person is arbitrary and simply refers to the characteristics of ‘Person 01’ in the household on HILDA. It is generally the male adult in the main family or the only adult in a one-adult household.

This report investigates the expenditure of typical Australian households and focuses mainly on older households. For this reason, households aged less than 20 years old and households classified as multi-family, group, other or not able to be classified are not covered by this report and have been removed from the findings. In addition, in line with previous research, households with negative household disposable income are excluded from the analysis herein.