Accounting for owner-occupied dwelling services: Aggregates and distributions

Research linking macro and micro statistics of dwelling services is in its infancy in the U.S. including work by the Bureau of Economic Analysis, Bureau of Labor Statistics, and the Census Bureau. Comparisons of aggregated estimates generated from micro-level data to estimates at the macro-level can inform both levels on the accuracy and precision of methods and data sources. In this study, the treatments of housing in the macro statistics of the National Accounts and in the micro statistics of household expenditure and income surveys are examined. Three approaches to value dwelling services using household survey data are compared: capitalization rate, hedonic, and rental equivalence. Estimates are produced using data from the U.S. Consumer Expenditure Survey and American Housing Survey. Estimated aggregates of implicit net rental income from owner-occupied housing are compared to the aggregate value in the National Accounts. Possible sources of differences in the macro- and micro-based aggregates are discussed. The effects of adding net implicit rental income on income distributions are examined, particularly on inferences about the relative well-being by the age of householder. Overall, only marginal reductions in income equality result when net rental incomes are added to before tax money income; this only occurs when reported rental equivalence and return to home equity are used as methods of rent estimation.