Disposable household income and purchasing power

A person’s purchasing power is based on the disposable household income. The disposable household income is defined as the gross income of all household members less paid income transfers, social contributions and taxes. The amount is subsequently adjusted for composition of the household and the number of household members and deflated with the consumer price index (CPI). The standardised household income, also termed purchasing power, is subsequently apportioned to each household member.

To monitor changes in purchasing power, the standardised household incomes in the year prior to and after the partner’s death are compared. The amount is adjusted for the total improvement of purchasing power over that period, so that income effects of the loss of the partner can be measured accurately. Persons who had remarried or were cohabiting in the course of the year after their spouse had died were not taken into account. Persons who turned 65 in the year before or after the loss of their partner have also been left out of account. Their income changed considerably, because they received old age pension from their 65th birthday onwards. People living in homes and institutions have not been  taken into account either.

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