Household wealthWhat we can learn

from micro data registers

Gitte Frej KnudsenSøren Brodersen

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The use of micro based registersHousehold wealth

Individuals• Income• Social status• Family type• Education• Working place

Micro based registers inthe wealth project • Dwellings• Household cars

Other micro based registers• Debt • Financial assets

Enterprises• Activity code• Number of employees• Turnover

Explaining variables at micro level Registers Use

ResearchStatisticsAnalysis

Example:Analysis of owner occupiers’ net wealth

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Households’ real assetsBillion DKK (current prices) 2004 2005 2006 2007 2008 2009Owner occupied dwellings 2.446 2.837 3.107 3.913 4.000 3.561

Co-operative dwellings 134 152 253 228 244 208

Housing assets, total 2.580 2.989 3.361 4.141 4.244 3.769GDP 1.466 1.545 1.632 1.691 1.737 1.660

Housing assets, % of GDP 176 193 206 245 244 227Household cars     132   188  

Yachts         10  

Aircrafts owned by households         1  

Real assets, total       4.443  

Main resultsHousehold wealth

Share of households’ real assets

95,5% 4,2%

+

0,3%

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Register: Market value for owner occupied dwellings

Household wealth

Real estate value register Real estate no.Official real estate valuation (tax value)

Building and estate registerReal estate no.Postal codeMunicipal codeRegion

MergingKey: Real estate no.

MergingKey: Real estate no.

Estate sales register Real estate no.Actual sale values

1. Geography dimension

Official valuation and geography dimensionReal estate no.Official real estate valuationPostal code, municipality, region

2. Real estate sales

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Register: Market value for owner occupied dwellings

Household wealth

Owners of real estateReal estate no.Personal ID no.Business register no.Owner share

Business registerBusiness register no.Type of ownership Owners belonging to the

household sectorReal estate no.Personal ID no.Business register no.Owner share

Filter: Persons and sole proprietorships

Official real estate valuations Real estate no.Official estate valuationsPostal code, municipality, regionActual sale values

Merging (basic register)Key: Real estate no.

3. Sector delimitation: Household sector

Owners belonging to the household sectorReal estate no.Personal ID no.Business register no.Owner share

4. Official estate valuations broken down by individuals and geography

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Estimation of actual market values for owner occupied dwellings

1. Estimation of coefficients relating actual sale values to official real estate valuations

k is a geographical area, e.g. a postal codej is an owner occupied dwelling (type j), traded in the geographical area k

2. Estimation of market value at micro level

Household wealth

J

Jkj

J

Jkj

k

1,

1,

) valuationestate real Official(

) valuessale(tcoefficien ueMarket val

Market value = Official estate value * market value coefficient

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Estimation of market values for owner occupied dwellings

Household wealth

One family houses only

Coefficients of actual sales values to official real estate values

0,80

0,90

1,00

1,10

1,20

1,30

2006 2007 2008 2009

West denmarkCopenhagen regionZealand

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Market values for co-operative dwellings

Challenges• No central registration of owners• No official real estate valuation of co-operative dwellings

Assumptions for estimation of market values atmicro level• All adults at the same address own equal shares of the co-operative dwelling• The total real estate value owned by the co-operative is distributed proportionally among

dwellings according to square meters• Coefficients between actual sales values and official estate value are estimated at

regional level only

Conclusion Estimates suffer from incomplete information for ownership and actual sales values

unlike register information on owner occupied dwellings

Household wealth

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Comparison between micro based market value and national accounts data on household real estate.

Note: Real estate of households includes dwellings and business real estate of household sector enterprises.

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

2004 2005 2006 2007 2008 2009Market value, buildings and landNational accounts, buildings National accounts, buildings and land

Billion DKK

Household wealth

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Register: Market value for household cars

Households’ real assets

Vehicle register Owners: Personal ID no. Business reg. no.Vehicle key numberManufacturer Model, variant, age… other technical data

Business registerBusiness register no.Type of ownership

Owners belonging to the household sectorPersonal ID no.,Business reg. no.Vehicle key numberManufacturer Model, variant, age… other technical data

Filter: Persons and sole proprietorships

1. Sector delimitation: Household sector

2. Market value

Price register from Danish Motorcar SocietyVehicle key numberAgeMarket value

MergingKeys: Vehicle key number, age

Imputation programmeImpute market value when no match is found

Owners belonging to the household sectorPersonal ID no.,Business reg. no.Vehicle key numberManufacturer Model, variant, age… other technical data

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Register: Market value for household cars

Households’ real assets

Merged Vehicle register with market value Owner ManufacturerModel, variant, age etc.Market value

Merging Keys: Personal ID no.

Business reg. no.

Registers with explaining variables (Statistics Denmark)Geographical localisation Composition of the owner's family Family income Housing condition …other explaining variables

3. Challenges• The Price register from Danish Motorcar Society contains only cars• No prices for cars older than 20 years • 10 percent of the household cars have no match between the Price register and the

Vehicle register

4. Assumptions for estimation of market values at micro level• No market value for household vans, motor cycles, mobile homes etc.• All cars older than 20 years have a market value equal to zero.• Imputed market values for 10 percent of the household cars

5. Explaining variables

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Household wealth 2008Household wealth

(in billion DKK) Household sector

  National accounts S.14 Aggregate micro data

Financial assets        

Currency AF.21 30  

Deposits AF.22 765 492

Securities other than shares AF.3 159 206

Quoted shares AF.511 106 122

Unquoted shares AF.512 232  

Other equity AF.513 161 16

Mutual funds shares AF.52 206  

Insurance - technical reserves AF.6 1.781  

Other accounts receivable AF.7 61  

Liabilities Securities other than shares AF.3 19 19

  

Loans AF.4 2.315 2.243

Other accounts payable AF.7 154

Net financial wealth 1.013 -1.426

Real assets Dwellings and other real estate 1.707* 4.244

  

Motor vehicles 245** 188**

Yachts and aircrafts owned by households   11 

  Net Wealth 2.965 3.017

* Excl. land

** Only Cars

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Summary

• Households’ real assets estimated at micro level amounts at the end of 2009 to approximately 2.4 times GDP

• Micro registers can be used for distribution analysis (by income, gender, age, family size, occupation etc.)

• Reliable estimates of market values for owner occupied dwellings at micro and macro level

• Estimates for co-operative dwellings are less reliable but still useful

Household wealth