Comparing income inequality across Census Bureau data bureau may result in conclusion that are not, in fact, representative of the American population by and large, a new research note states. This is because of the large shifts in household wealth, particularly during times of recession. In harder times, people’s job status can change more often and shift household wealth levels. This leads to larger swaths of the population frequently sliding between data sets, according to one Federal Reserve official. Thomas Garrett, assistant vice president and economist at the Federal Reserve Bank of St. Louis, said household incomes vary, making comparisons tough, if they “incorrectly assume” each quintile, equal to one-fifth of the population, contains the same households over time. “Comparing income quintiles from different years is a proverbial apples-to-oranges comparison because the households compared are at different stages in their earnings profile,” Garrett said. Garrett said nearly 58% of households in the lowest income quintile in 1996 moved higher by 2005, and almost half of the households in the second-lowest quintile moved to a higher quintile over the same period. Conversely, more than 57% of the wealthiest 1% of households in 1996 fell out of that category by 2005, while more than 45% of the wealthiest 5% slid further down the scale, as well. “Income mobility muddies the picture of income inequality derived from a simple comparison of income quintiles from different years,” Garrett said. Write to Jason Philyaw.
St. Louis Fed: Comparing Census Bureau household wealth stats inconclusive
May 13, 2011, 1:47pm
Jason Philyaw was a reporter with HousingWire through mid-2012.see full bio
Most Popular Articles
Latest Articles
From resilience to antifragility: Rethinking cybersecurity for real estate and mortgage professionals
In information security, we’ve long spoken about resilience. The goal has been to withstand an attack, recover quickly, and return to business as usual. But in today’s environment—where attackers adapt and evolve daily—resilience is no longer enough. We must go further. We must embrace antifragility.
-
From local to global: RE/MAX’s Chris Lim on the next era of real estate relationships
-
Stop marketing like it’s 2008: You’re invisible
-
RE/MAX accelerates real estate innovation with AI and technology
-
Retirement plans for small-business owners have visible generational gaps
-
VA loans rise as housing market shifts toward buyers
Jason Philyaw was a reporter with HousingWire through mid-2012.see full bio
