Small Area Consumption Estimates Combining Survey and Financial Footprints Data

We use small-area estimation methods that combine information from a household budget survey, a much larger survey of local demographics and employment, and area-level information on bank account outflows and energy consumption to estimate average equivalised consumption measures across 367 local authority districts in Great Britain. We show that including bank account data substantially improves our estimates, showing that these and other financial footprints data can play an important role in measuring local consumption and hence living standards. We also compare consumption measures that correspond to welfare under different assumptions about mobility and the capitalisation of local amenities into house prices, as well as traditional local income measures, and show that the rankings of local authorities are sensitive to the choice of measure.