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. Per capita household income
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 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
Luxembourg Income Study has a publicly available database with comparable
statistics on household incomes for several countries, as has the OECD.
These are the sources used. Below are presented the mean and median
disposable household incomes, adjusted for differences in household size. Thus,
the figures presented are per person and after all income taxes and mandatory
social contributions are paid. All figures were converted using respective
year purchasing power parities 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, UK, and
Sweden. The exact definition of income can be seen in the LIS website.
Generally, it includes all cash income and excludes most non-cash income. 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. However, because PPP rates are used, the
differences in prices for all other expenditres, include health and
education are already taken into account by definition. In terms of
underreporting, the U.S. dataset 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 $=
= Median equivalized disposable household income $=
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."
See also Income distribution
References ^ OECD Glossary of Statistical Terms -
Disposable income Definition ^ OECD Glossary of Statistical Terms -
Adjusted disposable income Definition ^ Household gross adjusted disposable
income per capita - Disposable income - National Accounts at a Glance 2014 -
OECD iLibrary ^ OECD Statistics
^ [1] ^ [2]
^ http:www.bls.gov2004age.pdf ^ http:www.nber.orgc12828.pdf
http:www.lisdatacenter.orgtechwps/2.pdf ^ a b LIS Cross-National Data Center in
Luxembourg ^ a b Currencies of the World
^ a b "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". Retrieved
2006-06-29. External links