Median household income

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The median household income is commonly used to generate data about geographic areas and divides households into two equal segments with the first half of households earning less than the median household income and the other half earning more.[1] The median income is considered by many statisticians to be a better indicator than the average household income as it is not dramatically affected by unusually high or low values."[2] The U.S. Census Bureau uses the following definitions of median and mean income:

“

Median income is the amount which divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income (average) is the amount obtained by dividing the total aggregate income of a group by the number of units in that group. The means and medians for households and families are based on all households and families. Means and medians for people are based on people 15 years old and over with income.[3]

 ”

Household income is not to be confused with family or personal income. Household income is often the combination of two income earners pooling the resources and should therefore not be confused with an individual's earnings. Even though the term family income may sometimes be used as a synonym for household income, the U.S. Census Bureau defines the two differently. While household income takes all households into account, family income only takes households with two or more persons related through blood, marriage or adoption into account.

Contents

International statistics[edit]

The annual median equivalised disposable household income for selected countries is shown in the table below. This is what a each equivalent adult in a household in the middle of the income distribution earns in a year.

Data are in United States dollars at current prices and current purchasing power parity for the reference year.

Rank Country Median
income		 Year[4]
1  Luxembourg 34,821 2010
2  Norway 32,820 2010
3  Switzerland 31,493 2009
4  United States 29,056 2010
5  Canada 28,914 2010
6  Austria 28,089 2010
7  Australia 27,946 2010
8  Denmark 26,744 2010
9  Netherlands 25,715 2010
10  Germany 25,569 2010
11  Finland 24,778 2010
12  Belgium 24,709 2010
13  Sweden 24,614 2010
14  Iceland 24,610 2010
15  France 24,221 2010
16  United Kingdom 24,047 2010
17  South Korea 23,994 2011
18  New Zealand 23,444 2009
19  Italy 21,894 2010
20  Ireland 21,804 2009
21  Japan 21,410 2009
22  Slovenia 20,385 2010
23  Spain 18,736 2010
24  Israel 16,957 2010
25  Greece 16,570 2010
26  Czech Republic 15,348 2010
27  Slovakia 14,473 2010
28  Portugal 14,064 2010
29  Poland 13,414 2010
30  Estonia 11,564 2010
31  Hungary 10,319 2009
32  Chile 9,577 2011
33  Turkey 7,944 2009
34  Mexico 5,132 2010

Median household income and the US economy[edit]

This graph shows the income of the given racial and ethnic groups, in 2011 dollars.[5]

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%,[6] while median household income has only increased by 15%. An economic recession will normally cause household incomes to decrease, often by as much as 10% (Figure 1).

Median household income is a politically sensitive indicator. Voters can be critical of their government if they perceive that their cost of living is rising faster than their income. Figure 1 shows how American incomes have changed since 1970. The last recession was the early 2000s recession and was started with the bursting of the dot-com bubble. It affected most advanced economies including the European Union, Japan and the United States.

The current crisis began with the bursting of the U.S. housing bubble, which caused a problem in the dangerously exposed sub prime-mortgage market. This in turn has triggered a global financial crisis. In constant price, 2011 American median household income is 1.13% lower than what it was in 1989. This corresponds to a 0.05% annual decrease over a 22-year period.[7] In the mean time, GDP per capita has increased by 33.8% or 1.33% annually.[8]

A comparison between Median Equivalised Household Income and GDP per Capita in USD for select developed countries is shown in the chart below.[9][10]

Median Equivalised Income VS GDP per Capita

See also[edit]

References[edit]

  1. ^ "U.S. Census Bureau: What is the difference between 'a median' and 'a mean'?". Retrieved 2011-09-13. 
  2. ^ "U.S. Census Bureau on the nature the median in determining wealth". Retrieved 2006-06-29. 
  3. ^ U.S. Census Bureau, Frequently Asked Question, published by First Gov.""U.S. Government, the different between mean and median". Archived from the original on 2006-09-22. Retrieved 2006-06-29. 
  4. ^ "OECD Statistics". OECD. Retrieved 2013-05-15. 
  5. ^ DeNavas-Walt, Carmen; Proctor, Bernadette D.; Smith, Jessica C. (September 2012). "Real Median Household Income by Race and Hispanic Origin: 1967 to 2010". Income, Poverty, and Health Insurance Coverage in the United States: 2011. U.S. Census Bureau. p. 8. 
  6. ^ IMF.org
  7. ^ Census.gov
  8. ^ BEA.gov
  9. ^ "OECD(2011), Society at a Glance 2011 - OECD Social Indicators". OECD. Retrieved 12 March 2012. 
  10. ^ "World Economic Outlook database October 2007". International Monetary Fund. Retrieved 12 March 2012. 
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