Tuesday, 1 June 2010

Trends: UK disposable income

I've been pretty interested recently the amount of money people spend on entertainment, culture, services, etc.  I've been trying to find some useful and trustworthy data on the levels of disposable income in the UK so that I can compare it to some other datasets (I'm thinking of mapping the level of disposable income against recorded music sales or recording industry claims about the scale of piracy).  I've found numerous reports funded by the UK tax payer that offer some interesting accounts of income levels.

However, I'm no economist.  I'm not even a statistician.  I often find comprehending big numbers a problem. I did manage to stumble across a rather simple looking dataset over on the National Statistics website that seemed to correspond with a period of time I'm interested in (1970s - present).   This only covers the period from 1971-2001/02 but it's useful enough:

The yellow line is the median/average amount of household disposable income over the period in questions.  The 10th, 25th, 75th and 90th refer to the percentile points in the group, or in plain English, the bottom 10% of households refers to the smallest income earners whereas the 90% refers to the highest income earners.

What does this all mean?

In short, from 1971-2002 the typical household disposable income increased from £180.12 per week to £311.08 per week.  There appear to be some marked inequalities in disposable income distribution, with sharp rises in the 1980s for the most wealthy earners, before stabilising in the 1990s. However, the trend does seem to indicate that the wealthier earners are the ones experiencing even greater levels of disposable income.  For example, the disposable income at the 10th percentile increases from £99.04 to £159.18 over the period (an increase of about 60%), whereas the 90th percentile increases from £314.31 to £635.90 (an increase of over 100%).

It would be interesting to factor into this the cost of living and inflation over the same period.

1 comment:

Research Paper said...

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