90/10 income inequality ratio

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Source: Institute for Fiscal Studies:  Living Standards, Inequality and Poverty Spreadsheet

Link: https://www.ifs.org.uk/tools_and_resources/incomes_in_uk

All statistics are based on IFS calculations using the Family Expenditure Survey (FES) up to and including 1992, and the Family Resources Survey (FRS) thereafter. Incomes are measured net of direct taxes and inclusive of state benefits and tax credits, and at the household level. Monetary amounts are pounds per week in 2013–14 prices. They are expressed as the equivalent for a childless couple using the Modified OECD equivalence scale. This is the same income definition that is used in the Government’s official publication: Households Below Average Income (HBAI). Details are given in the IFS’s accompanying Commentary.

Income is therefore defined as net equivalised household income, and is measured both before housing costs are deducted (BHC) and after housing costs are deducted (AHC).

In order to be comparable across time, we adjust BHC and AHC incomes for inflation using a variants of the Consumer Price Index that includes and excludes all housing costs respectively. These differs from the statistcs produced by the government in “Households Below Average Income”, which adjust for inflation using a series again based on the Retail Price Index. We do not use this as it significantly overstates inflation. For details of the adjustment for inflation, see the Worksheet named “Deflators”.