Publication type
Research Paper
Series Number
96-07
Series
Working Papers of the ESRC Research Centre on Micro-Social Change
Author
Publication date
August 1, 1996
Abstract:
Trends in real national income are typically assessed using aggregate indicators such as GDP per capita, or mean household income, whereas the income distribution literature focuses on trends in income inequality. By contrast this paper takes an integrated approach to real national income measurement; it uses methods incorporating both size and distributional considerations, and applies them to household income microdata in order to measure changes in real income in the U.K. over the period during the 1980s. A parametric class of decomposable real income indices is proposed which complements quasi-ordering methods such as rank and generalised dominance criteria by telling us how much real income increased over the period (if at all). The indices are also additively decomposable by population subgroup, a property which helps reveal who the gainers and losers were. The analysis also draws attention to the normative and statistical issues raised by the presence of a few very small incomes.
Subjects
Notes
working paper
#496972