Disposable household and per capita income

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 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.

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 taken as 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.

It is important to note in the tables below the difference between median and mean 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.

Disposable income per capita (OECD)

Mean

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" [1] "plus transfers in kind" received mainly from government, such as healthcare and education.[2] In other words, it only includes taxes and transfers. 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 purchasing power parity (PPP) so to adjust for costs of living.

Median

The following table represents data from OECD's "median disposable income" metric per person, which includes all forms of income as well as taxes and transfers in kind from governments for benefits such as healthcare and education. This metric, in addition to using a median rather than a mean, uses "data calculated according to the new OECD terms of reference"; compared to previous terms of reference, these "include a more detailed breakdown of current transfers received and paid by households as well as a revised definition of household income, including the value of goods produced for own consumption as an element of self-employed income."[4] As OECD displays median disposable incomes in each country's respective currency, the values were converted here using the World Bank's PPP conversion factors, accounting for each country's cost of living in the year that the disposable median income was recorded.[5] Unless noted otherwise, all data refers to 2016.

Luxembourg Income Study

Luxembourg Income Study (LIS) has a publicly available database with comparable statistics on household incomes for several countries, as has the OECD.[6] These are the sources used.

Below are presented the mean and median disposable household incomes, adjusted for differences in household size.[7] 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 parity (PPP) for private consumption, which is recommended when comparing incomes internationally.[8] 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.

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.[9] In terms of underreporting, the U.S. dataset (US Census) captured only 80% of the gross income aggregate as of 2004.[10] By contrast, Finland, UK, and Norway registered much higher coverage with less underreporting.[11]

Mean equivalized disposable household income (PPP) $

Rank Country NCU[12] Currency in 2004[13] PPP rate 2004[14] Mean Income (PPP)
1 United States32,195United States Dollar132,195
2 Canada33,785Canadian Dollar1.2726,602
3  Switzerland49,844Swiss Franc1.8826,512
4 United Kingdom16,685British Pound0.6426,070
5 Norway254,243Norwegian krone9.825,943
6 Austria22,527Euro0.8925,311
7 Germany20,901Euro0.9122,968
8 Denmark202,275Danish Krone9.022,475
9 Netherlands20,607Euro0.9222,398
10 Sweden203,460Swedish Krona9.621,193
11 Belgium19,563Euro0.92421,173
12 South Korea18,587,000Won886.220,937
13 France19,547Euro0.95220,532
14 Australia29,417Australian Dollar1.4420,428
15 Japan2,986,594Yen150.819,805
16 Spain14,003Euro0.78817,770
17 Italy15,835Euro0.9117,401
18 Poland14,844Polish złoty2.087,136

Median equivalized disposable household income (PPP) $

See also the country lists in the median income article.

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.[15]

Rank Country NCU[12] Currency in 2004[13] PPP rate[14] Median Income (PPP)
1 United States26,672United States Dollar126,672
2  Switzerland45,050Swiss Franc1.8823,962
3 Norway233,186Norwegian Krone9.823,794
4 Canada29,394Canadian Dollar1.2723,144
5 Austria20,134Euro0.8922,622
6 Denmark192,937Danish krone9.021,437
7 United Kingdom13,637British Pound0.63721,408
8 Germany18,507Euro0.9120,337
9 Netherlands18,507Euro0.9120,116
10 Sweden189,475Swedish Krona9.619,736
11 Belgium17,818Euro0.92419,284
12 South Korea16,665,877Won886.218,806
13 France17,120Euro0.95217,984
14 Australia25,581Australian Dollar1.4417,764
15 Japan2,644,730Yen150.817,538
16 Spain12,319Euro0.78815,633
17 Italy13,367Euro0.9114,689
18 Poland12,697Polish złoty2.086,104

See also

References

  1. Directorate, OECD Statistics. "OECD Glossary of Statistical Terms - Disposable income Definition". stats.oecd.org.
  2. Directorate, OECD Statistics. "OECD Glossary of Statistical Terms - Adjusted disposable income Definition". stats.oecd.org.
  3. "Household accounts - Household disposable income - OECD Data". theOECD.
  4. Income Distribution and Poverty: Median disposable income (current prices). OECD. Accessed August 6, 2018.
  5. PPP conversion factor.
  6. OECD. "OECD Statistics". stats.oecd.org.
  7. Archived September 9, 2009, at the Wayback Machine
  8. Archived January 12, 2011, at the Wayback Machine
  9. http://www.bls.gov/cex/2004/Standard/age.pdf
  10. https://www.nber.org/chapters/c12828.pdf
  11. http://www.lisdatacenter.org/wps/techwps/2.pdf
  12. "LIS Cross-National Data Center in Luxembourg". www.lisdatacenter.org.
  13. "Currencies of the World". fx.sauder.ubc.ca. Archived from the original on 2011-11-29. Retrieved 2011-05-13.
  14. "PPPs and exchange rates". From the drop down menu select PPPs for private consumption. OECD stat extracts. Retrieved 13 May 2011.
  15. "U.S. Census Bureau on the nature the median in determining wealth" (PDF). Retrieved 2006-06-29.
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