Using Budget Standards to Assess the Well-Being of Families

Abstract

This paper describes the methods used by the Budget Standards Unit at the Social Policy Research Centre to develop a set of indicative budget standards for a range of Australian households. Some of the results from the project are then compared with estimates of actual household expenditures derived from the Household Expenditure Survey conducted by the Australian Bureau of Statistics. The sensitivity of budget standards to some of the key assumptions and judgements made in developing them is illustrated in two examples: housing costs and spatial variations in prices. The paper concludes that one important contribution that budget standards research can make to the discussion of the adequacy of household incomes is in providing a transparent framework for selecting items needed to maintain a particular standard of living and translating them through prices into the budgets required to purchase them.