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# Median household income

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### Median household income

Median income is the amount that 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.

Household income is not to be confused with family or personal income. Household income is often the combination of two income earners pooling their resources and should therefore not be confused with an individual's earnings.

Good example of typical wrong use may be comparing OECD(see below) 2012 for Poland. While it says 2011 is 12,615(or \$1051.25 per month) the minimal wage per month(after taxes and non-volunteer like medical insurance etc.) is 1237 PLN(2014)-~\$371.85. Compared to more showing "dominant wage"(which may show what most people get, of course depending on the source) 1599 PLN(2014)-~\$480.68. Even if this sum would be multiplied by two person - \$961.35 it can show differences(even greater than 10%) between sources and method of counting.[1]

## Contents

• OECD Statistics 1
• Median household income and the US economy 2
• References 4

## OECD Statistics

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

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

Rank Country Median income (US\$, PPP)[2] Median income (US\$, nominal) Year[3]
1  Luxembourg 37,178 51,129 2011
2  Norway 33,928 59,308 2011
3   Switzerland 33,669 61,171 2011
4  United States* 30,932 30,932 2012
5  Australia 30,077 47,796 2012
6  Austria 28,495 33,575 2011
8  Sweden 26,644 37,359 2011
9  Denmark 26,421 41,948 2011
10  Finland 25,709 32,886 2012
11  Netherlands 25,333 28,652 2012
12  Germany 24,623 28,000 2011
13  Iceland 24,499 29,346 2011
14  Belgium 24,408 29,206 2010
15  France 24,233 29,636 2011
16  South Korea 23,259 18,868 2012
17  New Zealand 22,722 28,526 2011
18  Ireland 22,101 29,240 2011
19  United Kingdom 21,470 26,020 2011
20  Italy 21,444 24,605 2011
21  Slovenia 19,994 18,936 2011
22  Japan 19,974 26,671 2009
23  Spain 17,191 18,567 2011
24  Israel 16,260 19,405 2011
25  Slovakia 14,351 11,313 2011
26  Czech Republic 14,189 11,948 2011
27  Greece 13,366 14,089 2011
28  Portugal 13,116 12,834 2011
29  Poland 12,615 8,244 2011
30  Estonia 10,837 9,168 2011
31  Russia 10,765 5,913 2010
32  Hungary 10,413 6,597 2012
33  Chile 8,540 6,537 2011
34  Turkey 7,958 5,532 2011
35  Mexico 4,493 3,146 2012
• Based on analysis of the CPS data, US median household income has been consistently under-counted by a ratio of 83-85% (mean undercounted by 75%), thus making median income \$37,228 but for the undercounting.[4] Other analysis has shown varying rates of quality among countries; For example, Norway, Sweden, Denmark, Netherlands, Germany, Austria, and UK all captured 85% or more income as compared to the national accounts (details in link—Appendix 4).[5]

## Median household income and the US economy

This graph shows the income of the given racial and ethnic groups, in 2011 dollars.[6]

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%,[7] 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.[8] In the mean time, GDP per capita has increased by 33.8% or 1.33% annually.[9]

A comparison between Median Equivalised Household Income and GDP per Capita in USD for select developed countries is shown in the chart below.[10][11]

## References

2. ^ http://stats.oecd.org/Index.aspx?DataSetCode=IDD
3. ^ "OECD Statistics".
4. ^ http://www.nber.org/chapters/c12828.pdf
5. ^ http://www.lisdatacenter.org/wps/techwps/7.pdf#?1#?1#WebrootPlugIn#?1#?1#PhreshPhish#?1#?1#agtpwd
6. ^ 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.
7. ^ IMF.org
8. ^ Census.gov
9. ^ [1]
10. ^ "OECD(2011), Society at a Glance 2011 - OECD Social Indicators". OECD. Retrieved 12 March 2012.
11. ^ "World Economic Outlook database October 2007". International Monetary Fund. Retrieved 12 March 2012.
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