Many countries periodically conduct a household income and expenditure survey (HIES).
This type of household enquiry provides direct insight in the economic situation of
households. More importantly, by repeating the survey on a periodic basis, trends can be
discerned. This informs statistics users about whether households have improved their
economic situations over the intervening period, or possibly that they are now less well off
than before. Such trends are caused by economic developments that are not necessarily
under the control of policy makers. Nevertheless the effect of policy decisions can be
studied through a HIES, for example the result of measures intended to support
economically vulnerable segments of the population.
Timor-Leste never had a household income and expenditure survey before, but in January
2011 the first instance of this survey was started, to be conducted over an entire year. This
duration reduces the effects of seasonality on the results. The HIES was not just supposed to
provide results useful for monitoring economic wellbeing. It would also generate data for
the consumption side of national accounts and improve the composition of the baskets of
goods and services used in calculations of the CPI.
The survey was designed entirely in Timor-Leste, although obviously the experience from
other countries was taken into account in specifying the methodology. Funding also came
exclusively from national resources. Incidental technical assistance was provided by the
European Union.
The field work covered 4,800 private households throughout the national territory, about 1
out of every 40 private households. The District of Oecusse received a double sampling rate,
in order to produce statistically significant results for this isolated part of the nation. The
sample is sufficient to provide results at the national, urban/rural, and Oecusse levels with a
95% confidence interval for a maximum sampling error of 4.5%.
The HIES has generated a wealth of information which cannot be presented within the
context of an executive summary. Even the remainder of the present report only provides a
limited summary of what is available. The data files and sustaining information have been
stored in a particular format suitable for future use by other investigators, see Annex 1.
On the income side the survey concludes that the mean monthly household income was $
378 (urban: $ 634, rural $ 292). It should be considered that the equivalent rental value of
owned homes is counted as part of the income. In urban areas this accounts for as much as $
110 of the income. Nevertheless, important differences between urban and rural areas have
been apparent throughout the survey results. Both incomes and expenditures are
substantially higher in urban Timor-Leste.
Taking into account household sizes, mean per capita income comes to $ 62 (urban: $ 93,
rural $ 50). Median incomes are found to be considerably lower than the mean values. This is caused by the mean value of income (“average”) being raised considerably by the
presence of a small number of rather high-income households. Median per capita income
comes to only $ 40 (urban: $ 64, rural: $ 32). In other words: half of the population lives on
$ 40 or less per person per month.
On the expenditure side the survey concludes that the mean monthly household expenditure
was $ 297 (urban: $ 532, rural $ 219). It should be considered that the equivalent rental
value of owned homes is counted as part of income as well as expenditure. Again, in urban
areas this accounts for over $ 110 of the monthly amount.
Taking into account household sizes, mean per capita expenditure comes to $ 49 (urban: $
78, rural $ 38). Once again, the median expenditures are considerably lower than the mean
values. This happens because the mean value of expenditure (“average”) is pushed up by a
limited number of relatively high-spending households. Median monthly per capita
expenditure comes to only $ 34 (urban: $ 58, rural: $ 30).
The per capita expenditure is calculated to be lower than income at the median level by 10
to 15%. Explaining this requires further analysis. It might be a sign of the build-up of
household reserves outside official bank accounts or traditional savings schemes, but other
causes cannot yet be excluded.
Incomes and expenditures are reported in greater detail in Sections 5.2 to 5.5 of this report.
The economic situation of households has large consequences for their living conditions.
The HIES has looked into many demographic and social parameters, as accounted for in
Chapter 6. The associated statistical information reported there allows linking the current
survey into other statistical collections (Census, LFS, TL-DHS, TL-SLS…). It also permits
relating particular indicators in education, health, employment and food security to
economic factors. The present report has only made a modest start with this analysis.