Household 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 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 (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" ^[1] "plus transfers in kind" received mainly from government, such as healthcare and education.^[2] 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.

Rank Country/Territory 2011 Per Capita (PPP$)[3] 1  United States 40,240 2  Norway 34,791 3  Germany 31,868 4  Australia 32,362 5  Austria 30,609 6  Canada 30,030 7  France 29,876 8  Belgium 28,657 9  United Kingdom 27,927 10  Finland 27,924 11  Netherlands 27,510 12  Denmark 26,444 13  Italy 26,275 14  Japan 26,274 15  Ireland 24,594 16  Spain 23,983 17  Slovenia 21,305 18  Portugal 20,663 19  Greece 20,303 20  South Korea 18,592 21  Czech Republic 17,868 22  Slovak Republic 17,508 23  Poland 15,640 24  Estonia 13,858 25  Mexico 13,824 26  Chile 12,041

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.^[4] These are the sources used.

Below are presented the mean and median disposable household incomes, adjusted for differences in household size.^[5] 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.^[6] 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.^[7] 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 (US Census) captured only 80% of the gross income aggregate as of 2004.^[8] By contrast, Finland, UK, and Norway registered much higher coverage with less underreporting.^[9]

Mean equivalized disposable household income (PPP) $

Rank	Country	NCU[10]	Currency in 2004[11]	PPP rate 2004[12]	Mean Income (PPP)
1	United States	32,195	United States Dollar	1	32,195
2	Canada	33,785	Canadian Dollar	1.27	26,602
3	Switzerland	49,844	Swiss Franc	1.88	26,512
4	United Kingdom	16,685	British Pound	0.64	26,070
5	Norway	254,243	Norwegian krone	9.8	25,943
6	Austria	22,527	Euro	0.89	25,311
7	Germany	20,901	Euro	0.91	22,968
8	Denmark	202,275	Danish Krone	9.0	22,475
9	Netherlands	20,607	Euro	0.92	22,398
10	Sweden	203,460	Swedish Krona	9.6	21,193
11	Belgium	19,563	Euro	0.924	21,173
12	South Korea	18,587,000	Won	886.2	20,937
13	France	19,547	Euro	0.952	20,532
14	Australia	29,417	Australian Dollar	1.44	20,428
15	Japan	2,986,594	Yen	150.8	19,805
16	Spain	14,003	Euro	0.788	17,770
17	Italy	15,835	Euro	0.91	17,401
18	Poland	14,844	Polish złoty	2.08	7,136

Median equivalized 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."^[13]

Rank	Country	NCU[10]	Currency in 2004[11]	PPP rate[12]	Median Income (PPP)
1	United States	26,672	United States Dollar	1	26,672
2	Switzerland	45,050	Swiss Franc	1.88	23,962
3	Norway	233,186	Norwegian Krone	9.8	23,794
4	Canada	29,394	Canadian Dollar	1.27	23,144
5	Austria	20,134	Euro	0.89	22,622
6	Denmark	192,937	Danish krone	9.0	21,437
7	United Kingdom	13,637	British Pound	0.637	21,408
8	Germany	18,507	Euro	0.91	20,337
9	Netherlands	18,507	Euro	0.91	20,116
10	Sweden	189,475	Swedish Krona	9.6	19,736
11	Belgium	17,818	Euro	0.924	19,284
12	South Korea	16,665,877	Won	886.2	18,806
13	France	17,120	Euro	0.952	17,984
14	Australia	25,581	Australian Dollar	1.44	17,764
15	Japan	2,644,730	Yen	150.8	17,538
16	Spain	12,319	Euro	0.788	15,633
17	Italy	13,367	Euro	0.91	14,689
18	Poland	12,697	Polish złoty	2.08	6,104

See also

• Income distribution

References

1. ↑ OECD Glossary of Statistical Terms - Disposable income Definition
2. ↑ OECD Glossary of Statistical Terms - Adjusted disposable income Definition
3. ↑ Household gross adjusted disposable income per capita - Disposable income - National Accounts at a Glance 2014 - OECD iLibrary
4. ↑ OECD Statistics
5. ↑ Archived September 9, 2009 at the Wayback Machine
6. ↑ Archived January 12, 2011 at the Wayback Machine
7. ↑ http://www.bls.gov/cex/2004/Standard/age.pdf
8. ↑ http://www.nber.org/chapters/c12828.pdf
9. ↑ http://www.lisdatacenter.org/wps/techwps/2.pdf
10. 1 2 LIS Cross-National Data Center in Luxembourg
11. 1 2 Currencies of the World
12. 1 2 "PPPs and exchange rates". From the drop down menu select PPPs for private consumption. OECD stat extracts. Retrieved 13 May 2011. 
13. ↑ "U.S. Census Bureau on the nature the median in determining wealth" (PDF). Retrieved 2006-06-29. 

External links