Small area consumption estimates for local authorities in Great Britain

In this paper, we estimate average equivalised consumption measures across local authority districts in Great Britain. 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 card transactions and energy consumption. Simulations indicate that our measures significantly outperform sample averages taken from the budget survey alone, as well as naive regression imputation estimates. We also find that including transactions data substantially improves our estimates, suggesting these data could play an important role in measuring local consumption and hence living standards in the future. We compare our consumption estimates to local income measures and show the former is less unequally distributed across areas, and that the ranking of local authorities in terms of living standards is different under the two measures.