||This article needs to be updated. (April 2017)|
Household income is a measure of the combined incomes of all people sharing a particular household or place of residence. It includes every form of income, e.g., salaries and wages, retirement income, near cash government transfers like food stamps, and investment gains.
Average household income can be used as an indicator for the monetary well-being of a country's citizens. Mean or median net household income, after taxes and mandatory contributions, are good indicators of standard of living, because they include only disposable income and acknowledge people sharing accommodation benefit from pooling at least some of their living costs.
Average household incomes need not map directly to measures of an individual's earnings such as per capita income as numbers of people sharing households and numbers of income earners per household can vary significantly between regions and over time.
Disposable Income per capita (OECD)
The list below represents a national accounts derived indicator based on adjusted gross income, which is defined as "the balance of primary incomes of an institutional unit or sector by adding all current transfers, except social transfers in kind, receivable by that unit or sector and subtracting all current transfers, except social transfers in kind, payable by that unit or sector; it is the balancing item in the Secondary Distribution of Income Account"  "plus transfers in kind" received mainly from government, such as healthcare and education. It is based on the national accounts, which follows a standardized accounting (System of National Accounts) so to allow for comparability. It is also not survey based, which avoids survey errors and underreporting. The following is published by the OECD and is presented in PPPs so to adjust for costs of living.
Luxembourg Income Study
Below are presented the mean and median disposable household incomes, adjusted for differences in household size. Thus, the figures presented are per person (equivalized) and after all income taxes and mandatory social contributions are paid. All figures were converted using respective year purchasing power parities (PPP) for private consumption, which is recommended when comparing incomes internationally. The PPP conversion rates are taken directly from the OECD database. All incomes are in the prices when income was earned, and refer to year 2004, except for Australia (2003), UK (2004–2005), and Sweden (2005). The exact definition of income can be seen in the LIS website (variable DPI). Generally, it includes all cash income (e.g., earnings, pensions, interests, dividends, rental income, social transfers) and excludes most non-cash income (e.g., employer contributions to social insurances, governmental health care, education). Note that capital gains are excluded from the income definition.[clarification needed]
Caution should be made when comparing countries based on a strict ranking, since not all datasets are capturing income equally. For instance, income spent on private health insurance, which in 2004 was about $1300 per household in the US, is not subtracted. In terms of underreporting, the U.S. dataset (US Census) captured only 80% of the gross income aggregate as of 2004. By contrast, Finland, UK, and Norway registered much higher coverage with less underreporting.
Mean equivalized disposable household income (PPP) $
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|Rank||Country||NCU||Currency in 2004||PPP rate 2004||Mean Income (PPP)|
|1||United States||32,195||United States Dollar||1||32,195|
|4||United Kingdom||16,685||British Pound||0.64||26,070|
Median equivalised disposable household income (PPP) $
Median household income divides households in a country or region into two equal segments with the first half of households earning less than the median household income and the other half earning more. It is considered by many statisticians to be a better indicator than the mean household income as it is not dramatically affected by unusually high or low values."
|Rank||Country||NCU||Currency in 2004||PPP rate||Median Income (PPP)|
|1||United States||26,672||United States Dollar||1||26,672|
|7||United Kingdom||13,637||British Pound||0.637||21,408|
- OECD Glossary of Statistical Terms - Disposable income Definition
- OECD Glossary of Statistical Terms - Adjusted disposable income Definition
- OECD Statistics
-  Archived September 9, 2009, at the Wayback Machine.
-  Archived January 12, 2011, at the Wayback Machine.
- LIS Cross-National Data Center in Luxembourg
- Currencies of the World
- "PPPs and exchange rates". From the drop down menu select PPPs for private consumption. OECD stat extracts. Retrieved 13 May 2011.
- "U.S. Census Bureau on the nature the median in determining wealth" (PDF). Retrieved 2006-06-29.