|The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (April 2010)|
The median household income is commonly used to generate data about geographic areas and divides households into two equal segments with the first half of households earning less than the median household income and the other half earning more. The median income is considered by many statisticians to be a better indicator than the average household income as it is not dramatically affected by unusually high or low values." The U.S. Census Bureau uses the following definitions of median and mean income:
Household income is not to be confused with family or personal income. Household income is often the combination of two income earners pooling the resources and should therefore not be confused with an individual's earnings. Even though the term family income may sometimes be used as a synonym for household income, the U.S. Census Bureau defines the two differently. While household income takes all households into account, family income only takes households with two or more persons related through blood, marriage or adoption into account.
The annual median equivalised disposable household income for selected countries is shown in the table below. This is what each equivalent adult in a household in the middle of the income distribution earns in a year.
Data are in United States dollars at current prices and purchasing power parity for private consumption for the reference year. Data is from OECD statistics.
|Rank||Country||Median income (US$, PPP)||Median income (US$, nominal)||Year|
Median household income and the US economy
Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%, while median household income has only increased by 15%. An economic recession will normally cause household incomes to decrease, often by as much as 10% (Figure 1).
Median household income is a politically sensitive indicator. Voters can be critical of their government if they perceive that their cost of living is rising faster than their income. Figure 1 shows how American incomes have changed since 1970. The last recession was the early 2000s recession and was started with the bursting of the dot-com bubble. It affected most advanced economies including the European Union, Japan and the United States.
The current crisis began with the bursting of the U.S. housing bubble, which caused a problem in the dangerously exposed sub prime-mortgage market. This in turn has triggered a global financial crisis. In constant price, 2011 American median household income is 1.13% lower than what it was in 1989. This corresponds to a 0.05% annual decrease over a 22-year period. In the mean time, GDP per capita has increased by 33.8% or 1.33% annually.
- Mean household income
- Income distribution
- Income quintiles
- Household income in the United States
- International Ranking of Household Income
- Median household income in Australia and New Zealand
- Median income per household member
- Places in the United States with notable demographic characteristics
- Poverty in the United States