Reference budgets

1.1 Methodology

Reference budgets are priced baskets of goods and services that represent a certain standard of life in a given society. The reference budget calculated by STATEC refers to a living standard that can best be described as ‘modest but adequate’. The budget should be sufficiently high to allow individuals to participate adequately in society and lead a decent life, meanwhile representing a low level of consumption. The budget is calculated for different types of hypothetical households. The members of the households present a series of caracteristics (they are in good health, do not have any specific medical needs, are well informed about their rights and are able to manage their budget in a rational way).

The reference budget is composed of different baskets of goods and services that relate to all aspects of life: healthy food, clothing, personal hygiene, housing, mobility, social life, lifelong learning and special needs of children.

There are different methods to construct a reference budget. The Luxembourgish reference budget is based on a methodology developed in the framework of two European research projects:

  • ImPRovE (Poverty Reduction in Europe: Social Policy and Innovation)  financed by the 7th framework programm of the European Union and coordinated by Béa Cantillon and Tim Goedemé from Herman Deleeck Centre for Social Policy (CSB) , University of Antwerp (Goedemé, Storms, Stockman, et al. 2015).
  • The European Platform on Reference budgets

The objective of these two projects was to develop a European methodology to construct comparable reference budgets starting from common principles.

The reference budget is based on three information sources in order to define the exact content of the baskets:

  1. the international, European and national legislative framework;
  2. research and expert knowledge;
  3. focus groups.

The costs of the goods and services included in the baskets reflect real market prices and are mainly selected in the database of the Consumer Price Index (CPI) of STATEC.

The budget is presented as a monthly budget including the expenses of all the baskets. Since it is a long-term budget, it also comprises the costs for investments households need to make in order to buy durable goods, such as furniture or electronic devices.

1.2 Presentations

1.3 Legal basis

1.3.1 National

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1.3.2 Community

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1.4 Documentation

1.4.1 Publications of STATEC

Analyses

Regards

Cahier économique

1.5 Quality reports

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