Distribution of income

Domain: 
Dynamic, resilient local economies
Sub-Domain: 
Income and wealth
Measure: 
P80/P20 Ratio of Equivalised Gross Weekly Household Income
Rationale: 
1

Equivalised household income can be viewed as an indicator of the economic resources available to a standardised household. For a lone person household it is equal to household income. For a household comprising more than one person, it is an indicator of the household income that would be needed by a lone person household to enjoy the same level of economic wellbeing.

Economic wellbeing is a crucial element that contributes to quality of life because most basic needs such as food, water, shelter, health care and many forms of recreation have to be purchased. However, quality of life is not based solely on income and wealth, rather it is an integration of social, environmental and economic factors. Measures of income levels do not necessarily account for the way in which income is distributed amongst the population. For example, income increases concentrated in a small sector of the population (e.g. CEOs) do not translate into an increase in the standard of living for the general population even though there has been a rise in average weekly earnings. It therefore becomes important to have a measure of dispersion for both income and distribution (CIV, 2006).

Data Source: 
Data under development
References: 
Community Indicators Victoria (CIV) (2007) Metadata, Retrieved from http://www.communityindicators.net.au/indicator_metadata


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