rivista italiana di economia demografia e statistica - Sieds

Rivista Italiana di Economia Demografia e Statistica 59
Table 1 – Average equivalent income at PPP not including and including imputed rent.
Without imputed rent
With imputed rent
Baseline=
Baseline=
Country
Baseline=
Baseline=
Income Without
Income Without
EU4
EU4
IR
IR)
EU4 17,291 100.0 100.0 21,243 122.9 100.0
ES 13,866 100.0 80.2 18,011 129.9 84.8
FR 17,103 100.0 98.9 21,099 123.4 99.3
IT 16,194 100.0 93.7 19,279 119.0 90.8
UK 20,421 100.0 118.1 25,025 122.5 117.8
By considering average income in the four European Countries (EU4) as a baseline,
both including IR (column 4 of table 1) or not (column 7 of table 1), we can analyze
the possible changes in purchasing power for the different Countries arising from the
use of IR. ES presents the largest increase of the average equivalent income in respect
of the average income without IR (80.2% vs 84.8%). To the opposite, the Italian
relative position decreases in purchasing power (from 93.7% to 90.8%, -2.9 points),
while FR and UK show a stable positioning (respectively around 99% and 118%).
These results are to be integrated with the figures in table 2. Indeed, ES has the highest
percentage of owner-occupiers households (81%), that is the subgroup with the highest
level of figurative income coming from dwelling services; moreover, it presents an
high level of average full rent at PPP, that is the base to estimate IR (column 3 of table
2). It is interesting the case of IT in respect of UK: while the two Countries have quite
similar relative size of owner-occupiers and tenants at market rate, the percentage of
free tenants is higher in IT compared to UK, and the opposite holds true for tenants at a
reduced market rate; free tenants account for an higher increase of figurative income,
because they have the amount of estimated rent totally added to the income, while the
other group adds only the part exceeding the paid rents; furthermore, in UK it is
extensively adopted the supply of public subsidies for renting, component of income
that has to be removed. In such a case we would have expected an increase of the
relative income in IT in respect of UK, but it happens the opposite. This is probably
due to the fact that the dwelling services in UK are consistently higher than the ones
produced in the Italian market, this fact due to the much higher value of the rent market
in UK, even when evaluated at equivalent income at PPP.