Comparing the Household Economic Survey to administrative records: An analysis of income and benefit receipt (AP 17/01)

Abstract

We investigate the difference between people's survey responses to the Household Economic Survey (HES) and these same people's administrative income and benefit receipt records using the Integrated Data Infrastructure (IDI). 83% of people can be linked to the IRD data within the IDI. Those that are linked have higher incomes, are more likely to be male, are more likely to be of European descent and have lower reported benefit receipt than those who are not linked. HES reported total incomes (excluding benefit income and some other categories) are typically 1.5-6% higher than administrative measures of these same people's income. Despite this difference, there is still a strong correlation between HES and administrative income (about 0.79). On the other hand, reported benefit receipt in HES correlates poorly with the administrative measure. Benefits are under-reported on average, but many people also report receiving benefits that the administrative record says that they did not receive.

Acknowledgements

The authors are grateful to members of Treasury's Analytics and Insights team, especially the many helpful comments from Sarah Crichton and Sylvia Dixon. We would also like to thank Sarah Dovey from Statistics New Zealand for providing comments on an earlier draft. Finally we are grateful for conversations about this paper with Dean Hyslop. Naturally, any remaining errors are the sole responsibility of the authors.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this report are strictly those of the authors. They do not necessarily reflect the views of the New Zealand Treasury, Statistics New Zealand or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in this Analytical Paper.

The results in this report are not official statistics, they have been created for research purposes from the Integrated Data Infrastructure (IDI) managed by Statistics New Zealand.

Access to the anonymised data used in this study was provided by Statistics NZ in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Statistics Act 1975 are allowed to see data about a particular person, household, business or organisation and the results in this paper have been confidentialised to protect these groups from identification.

Careful consideration has been given to the privacy, security and confidentiality issues associated with using administrative and survey data in the IDI. Further detail can be found in the Privacy impact assessment for the Integrated Data Infrastructure available from www.stats.govt.nz.

The results are based in part on tax data supplied by Inland Revenue to Statistics NZ under the Tax Administration Act 1994. This tax data must be used only for statistical purposes, and no individual information may be published or disclosed in any other form, or provided to Inland Revenue for administrative or regulatory purposes.

Any person who has had access to the unit-record data has certified that they have been shown, have read, and have understood section 81 of the Tax Administration Act 1994, which relates to secrecy. Any discussion of data limitations or weaknesses is in the context of using the IDI for statistical purposes, and is not related to the data's ability to support Inland Revenue's core operational requirements.