Median household income

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The median household income is commonly used to provide 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.[1]

”

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 1 International statistics 2 Median household income and the economy 3 See also 4 References 5 Related links

[edit] International statistics

Median household income for selected countries is shown in the table below. The data for each country has been converted to U.S. dollars using purchasing power parity (PPP) (obtained from the Organisation for Economic Co-operation and Development).^[3] Note that PPP-adjusted household income is not reflective of relative buying power (or prosperity) between countries because different governments subsidize different services.

Country	Median household income national currency units	Year	PPP rate (OECD)	Median household income (PPP)
Switzerland[4]	(gross) 107,748 CHF, $99,482	2007	1.787236	$60,288
California, US[5]	55,450 USD	2007	1.00	$55,450
United States	50,233 USD	2007	1.00	$50,233
Canada [6]	53,634 CAD	2005	1.21	$44,000
Switzerland[4]	(after taxes and health insurance) 75,312 CHF, $69534	2007	1.723465	$43,698
New Zealand [7]	62,556 NZD	2007	1.54	$41,000
United Kingdom [8]	24,700 GBP	2004	0.632	$39,000
Australia[9]	53,404 AUD	2006	1.41	$38,000
Israel[10]	107,820 ILS	2006	2.90	$37,000
Ireland	35,410 EUR	2005	1.02	$35,000
Scotland, United Kingdom[11]	21,892 GBP	2005	0.649	$34,000
West Virginia, US[12]	US state			$33,000
Hong Kong[13]	186,000 HKD	2005	5.96	$31,000
Singapore[14]	45,960 SGD	2005	1.55	$30,000

[edit] Median household income and the economy

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%[1], 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 subprime mortgage market. This in turn has triggered a global financial crisis. American household incomes have only recently recovered from the early 2000s recession (see Figure 1).

The relationship between economic activity and household income varies substantially from country-to-country. Consider the situation of Equatorial Guinea, a small African oil state with one of the world's highest GDP per capita (USD$50,200). Equatorial Guinea's GDP per capita is 50% higher than Australia's, yet life expectancy in Equatorial Guinea is less than 50 years and most of their citizens live in abject poverty, the vast majority subsisting on less than $1 per day.

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	Equatorial Guinea	Australia	Iraq (war torn)
GDP per capita (PPP)	$50,200	$33,300	$1,900
Biggest export	Oil	Coal	Oil
Life expectancy	49.5	80.6	69.3
Infant mortality	87	5	68

Equatorial Guinea is a corrupt country,^{[citation needed]} which helps explain why most of the people do not benefit from the oil wealth.^{[citation needed]} However this issue isn't just about corruption. A comparison between median household income and GDP per capita for advanced countries is shown in Figure 2. These countries do not have serious corruption problems and yet there is only a weak correlation (R=0.16) between the two indicators. Showing that even when comparing advanced countries, differences in economic activity do not have a predictable effect on median household income.

Figure 2

Source: IMF GDP per capita[2]

[edit] See also

v • d • e Demographics of the United States Demographic history Economic and social Affluence · Educational attainment · Homeownership · Household income · Immigration · Income inequality · Language · Middle classes · Personal income · Poverty · Social class · Unemployment by state · Wealth Religion Prominent examples: Buddhist Americans · Christian Americans (Catholic Americans, Mormon Americans, Protestant Americans, etc.) · Hindu Americans · Jewish Americans · Muslim Americans · Neopagan Americans · Non-religious Americans · Sikh Americans Race, ethnicity, and ancestry Ethnic groups in the United States · American people by ethnic or national origin · History of the United States by ethnic group · American culture by ethnicity · Race and ethnicity in the United States Census · Ethnic groups in the United States · Maps of American ancestries · 2000 Census · Race/ethnicity by EEOC · Racism Major examples: Arab and Middle Eastern Americans · Black Americans (African Americans, African immigrants, Afro-Caribbeans, etc.) · Asian Americans (Chinese Americans, Filipino Americans, Indian Americans, Japanese Americans, Pacific Islander Americans, etc.)  · Hispanic and Latino Americans (Mexican Americans, Puerto Ricans in the United States, Cuban Americans, etc.) · White Americans (European Americans, Jewish Americans (by ethnic origin), etc.) · Multiracial Americans · Native Americans (Alaska Natives, Native Hawaiians, etc.)

• Household income in the United States
• Median household income in Australia and New Zealand
• International Ranking of Household Income
• Income quintiles
• Poverty in the United States
• Income distribution
• Median

[edit] References

[edit] Related links

• Places in the United States with notable demographic characteristics