Nearly 25 000 South African households are participating in Statistics SA's household income and expenditure survey (HIES).
This survey collects information on sources of income received by households and details of how they spend this income. The main use of the survey is to update the basket of goods and services for the consumer price index (CPI), which is the main economic indicator of inflation.
Until 2000, when the last HIES went to field, the survey was conducted every five years. This was based on the assumption that consumption patterns would remain largely constant over a five-year period.
However, the rate of technological change and the introduction of new goods and services have increased so rapidly that this assumption can no longer be justified.
In line with international practice, Stats SA is therefore introducing a three-year cycle for the updating of the CPI basket, and this necessitates conducting a new HIES every three years. The current HIES will be followed by a second round in 2008.
Studies of income and expenditure are invaluable in evaluating changes in household consumption patterns, levels of income and income distribution.
The primary objective is to provide appropriate and statistically reliable information on households' income and expenditure patterns from all types of settlements, which will be used to update the CPI basket. The CPI update will indicate which products to price for direct price collections from retail outlets.
The survey's secondary objective is to provide an independent source of information to estimate and improve figures on private consumption for estimation of the national accounts.
It is not just the frequency of the survey that is changing. Previous income and expenditure surveys conducted by Stats SA were based on a recall method. The HIES 2005/06 uses a different methodology based on a combination of respondent recall and the diary method.
Households forming part of the sample will record acquisitions in a diary. Internationally, the diary method is viewed as more reliable than exclusive use of recall. Agencies such as Statistics Sweden, the Australian Bureau of Statistics and the Botswana Statistical Agency have found that this method provides more accurate information.
Stats SA's master sample, based on the 2001 population census enumeration areas, has provided the sampling frame for this survey.
A total of 24 000 dwelling units, drawn from all nine provinces, will be visited. In each dwelling unit, a questionnaire will be administered and a diary kept. The enumerator will complete the summary questionnaire based on information from diaries received weekly.
particulars of income.
Participation in studies recording details of income and expenditure will require some effort and time. However, this will be invaluable in establishing changes in household consumption patterns, which, in turn, is essential for accurate measuring and monitoring of the CPI.