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At the minute the ONS (www.statistics.gov.uk) show the average full time male salary to be 24k (median average) and the female to be 18k. The Land Reg say average house is £180k.

So, Price/Earnings Ratio is 7.5, very different to what Halifax/Nationwide are saying.

I would love to see the same data for the 1989 (from these sources) so a 'factual' comparison can be made. But I can't find the info on those sites!!!

Edited by Jason

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The problem is the Nationwide doesn't make sense:

http://www.statistics.gov.uk/CCI/nugget.as...Rank=1&Rank=358

The above link (from the ONS) says "Median annual earnings for full-time employees for the 2002-03 tax year stood at £22,060" yet Nationwide says its £24,605.

The ONS also says "Median weekly pay for full-time employees in the UK grew by 4.7 per cent in April 2004 to reach £422" (or £21,944 pa), yet Natiowide says its £25,805.

Nationwide (& Halifax) PE Ratios seem to be made up!

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The problem is the Nationwide doesn't make sense:

http://www.statistics.gov.uk/CCI/nugget.as...Rank=1&Rank=358

The above link (from the ONS) says "Median annual earnings for full-time employees for the 2002-03 tax year stood at £22,060" yet Nationwide says its £24,605.

The ONS also says "Median weekly pay for full-time employees in the UK grew by 4.7 per cent in April 2004 to reach £422" (or £21,944 pa), yet Natiowide says its £25,805.

Nationwide (& Halifax) PE Ratios seem to be made up!

This is the kind of information that could be calmly and politely passed on to reporters. (See other thread.)

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The problem is the Nationwide doesn't make sense:

I suspect the divergence is because the ONS are giving the median value and the Nationwide are using the arithmetic mean value:

http://en.wikipedia.org/wiki/Median

Suppose 19 paupers and one billionaire are in a room. Everyone removes all money from their pockets and puts it on a table. Each pauper puts $5 on the table; the billionaire puts $1 billion (that is, $109) there. The total is then $1,000,000,095. If that money is divided equally among the 20 persons, each gets $50,000,004.95. That amount is the mean (or "average") amount of money that the 20 persons brought into the room. But the median amount is $5, since one may divide the group into two groups of 10 persons each, and say that everyone in the first group brought in no more than $5, and each person in the second group brought in no less than $5. In a sense, the median is the amount that the typical person brought in. By contrast, the mean (or "average") is not at all typical, since no one present—pauper or billionaire—brought in an amount approximating $50,000,004.95.

The arithmetic mean of wages will tend to be higher than the median, as there are lots of people earning average wages, and a few people who earn ridiculous amounts of money.

http://cnx.rice.edu/content/m10948/latest/

Distributions with positive skew have larger means than medians. The mean and median of the baseball salaries shown in figure 1 are $1,183,417 are and $500,000 respectively. Thus, for this highly-skewed distribution, the mean is more than twice as high as the median.

http://ideas.repec.org/p/nbr/nberwo/6378.html

Earnings distributions tend to be skewed to the right and display a long right tail. They are leptokurtic (positive fourth cumulant) and have a fat tail. Mean earnings always exceed median earnings and the top percentiles of earners account for a disproportionate share of total earnings.
Edited by zzg113

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I understand how Mean, Median and Model averages work, and as there is so many people in work in the UK the three averages would be similar.

But really my point is the Nationwide are not using reaslitic earning amounts, so the PE ratio looks far less than it should be.

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I understand how Mean, Median and Model averages work, and as there is so many people in work in the UK the three averages would be similar.

But really my point is the Nationwide are not using reaslitic earning amounts, so the PE ratio looks far less than it should be.

As I understand it, the mean is quite a bit higher in the UK than the median or modal averages, especially for men.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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