UK income distribution

Terms from Statistics for HCI: Making Sense of Quantitative Data

Graphs of income and wealth in most countries form a long-tail distribution, that is there are a large number of people with low or middle sized incomes and then a small number of people with very large incomes. The upper part of the graph typically follows closely to a power law, but at the lower end the effect of welfare benefits mean that there are few people with absolutely tiny incomes. The result for the UK is a highly asymmetric distribution that starts with counts close to zero (few people with no income), rises towards a mode at around £300 per week, and then drops rapidly, with only about 5% of people earning more than a thousand pounds per week. As with most asymmetric distributions, the median income (~£430 pw) is lower than the mean (μ) (~£530 pw). Because of the distorting effect of the long tail on the arithmetic mean (μ), when newspapers and government statistics quote the average income they are usually referring to the median income.

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