Income Statistics (Hansard, 4 April 1990)

§ Sir George Young

To ask the Secretary of State for Social Security if he will publish tables showing percentage changes in real income between 1981 and 1985 before and

c. Percentage changes in real income by cumulative decile group mean: 1981–85
	Below 10 per cent.	Below 20 per cent.	Below 30 per cent.	Below 40 per cent.	Below 50 per cent.	Total population
Percentage change in real income
Before housing costs	8.7	6.9	6.2	5.9	5.8	6.9
After housing costs	2.6	2.6	2.5	2.6	3.0	5.4

Figures at (a) and (b) are rounded to the nearest whole number. The information at (c) corrects figures, particularly after housing costs, contained in the current edition of "Households Below Average Income", following the discovery of errors in the treatment of housing costs in the assessment of family income in 1981 which came to light as a result of detailed work carried out by researchers from the Institute of Fiscal Studies with the co-operation of DSS officials. Corrected full details of the 1981 analysis will be included in the next edition of "Households Below Average Incomes". As explained in paragraph 7 of the Technical Annex to the current edition of "Households Below Average Income" the figures contained in these tables are subject to sampling error. These sampling errors, and other peculiarities in the Family Income Survey data, increase the risk of distortion at the extremes of the income distribution where the number of sample cases available is quite limited. The Government, on the advice of statisticians, have therefore concluded that measuring changes in real income by reference to decile midpoints (the median of each decile group) provides a statistically more reliable picture of living standards and propose to adopt this approach in future. However, to ensure continuity the next edition of "Households Below Average Income" will also contain figures from 1981 based on decile group means.

688W

after housing costs by (a) the midpoint of each decile group for the whole of the income distribution, (b) decile group means for the whole of the income distribution and (c) cumulative decile group means for the bottom half of the income distribution and the percentage increase for the total population, in each case using assumptions contained in households below average income; and if he will make a statement on which methodology is statistically more reliable.

a. Percentage changes in real income by decile group midpoint (medians of decile groups)
	Percentage change in income
Midpoint of decile group	before housing costs	after housing costs
1	5	4
2	6	2
3	5	3
4	6	2
5	5	4
6	7	7
7	7	7
8	8	7
9	8	8
10	9	9

b. Percentage changes in real income by decile group mean: 1981–85
	Percentage changes in income
Decile	before housing costs	after housing costs
1	9	3
2	6	2
3	5	3
4	5	3
5	6	4
6	7	6
7	7	7
8	8	7
9	8	8
10	7	5
Total	7	5