Thursday, May 28, 2009

Excellent Chart of Income

How does your pay compare with an MP's?

The BBC show a chart of income distribution which shows how the average is arguably less than we think, in that it is pulled higher by the long tail. Its amazing to see this compared to asking prices on Rightmove. Today I saw a detached house for £450,000 (18.5x salary) with only two bedrooms and less floor space than a 1 bed flat I once rented. What I find more amazing is that when you talk to people about this lunacy they have such a hard time seeing the problem. I would LOVE to see an earnings multiple per sqm legally displayed against each home - a proper side-by-side comparison of ripoffitude. More than that, I'd love to see at the start of The Apprentice; "..and a six figure salary, where Sir Alan's Apprentice could afford a 3-bed semi. Wooo." Wunch of bankers.

Posted by lukeskywalker @ 03:34 PM (984 views)
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3 thoughts on “Excellent Chart of Income

  • “I only handed over my money because I was shown property under construction,”

    I have some photos of gold you may also be interested in sir?

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  • bidin'matime says:

    This is why the median is often a better ‘average’ to use than the mean. When people say ‘average’, they usually mean the ‘mean’, ie add up all the incomes and divide by the number of people. This figure is skewed by the small number of very high incomes. The same applies to house prices, but I’m sure that if you constructed the same graph as they have there, but using house prices, you would not get such a long tale (the skew).

    The result is that any ratio of average (mean) prices to average (mean) incomes is somewhat unreliable – much better would be median house prices to median incomes, which I’m quite sure would show that, for the ‘average person’, the ‘average house price’ is in fact much higher than the published stats suggest.

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