Inspired by the Institute of Fiscal Studies' "Where do you fit in" application, where people can find out their position in the UK's income distribution, I wanted to find out how the picture in London looks like. Quite different. If you are in a very high percentile nationwide, high incomes of mainly financial sector employees in London make sure that you find yourself a couple of ranks further down. That's my guess anyway, but I think there is little reason to doubt where the big salaries are earned.
The data are not equivalized, i.e. does not take into account number of earners and dependents in a household.

Here's the plot. The code and info on how to get the data are available on github. The red lines mark the median (0.5 on the y axis) and the corresponding quantile. I.e. the median household income is somewhere in the £30-35K bracket (it's £33,430).


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  1. This data is ridiculous. You cannot live in London on £30k p.a. unless you live in zone 6 next to the M3 and don't travel to work.

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  2. Hi Mark,

    thanks for your comment. I'm not sure what you mean with "ridiculous", I assume you mean "wrong".

    1) The data from this graph was collected for the mayor of London's office to produce a report on household income and spending
    2) The firm who produced the estimates is called CACI, the data product is called PayCheck: http://www.caci.co.uk/paycheck.aspx
    3) I don't know anything about their sampling methodology, i.e. I'm in no position to defend their estimates
    4) Despite this, I don't see any strong reasons to believe that their estimates could be very wrong, since the mayor's office presumably hired them to find out the truth, but I guess you may have different views on this. In any case, you should step forward if you think there is a flaw in their data collection or analysis. Many people would be interested in what you have to say.
    5) What is really striking about your comment is that you make your statement as if it were obvious that what you are saying is the truth, with no backup whatsoever. Is the only reason really we should believe you that you say that "THIS DATA IS RIDICULOUS"? What makes you think that I should believe more in what you are saying, than this statistical report? I'm tempted to ask if you are serious, but I guess you are. Therefore, point six:
    6) You should never extrapolate from your own experience, or your friends' and family's, to a larger group about which you know very little. If this dataset says that the median income is 30K in London, well - unless you find a reason why that estimate is wrong and come up with a better one - the median income is 30K.
    7) I live in zone 2 on 17K per year. I travel to work. On a bike.
    8) I hope you will leave a reply and/or check back in the future. Let's try to avoid strong language if at all possible.

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    1. Hahaha point 7 alone would've been sufficient to rebuff the badly argued point Mark made! Well put and more helpful with all the rest included though .

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UPDATE: Following up on a comment below, I used another data source, ONS JOBS02 for the labor market statistics. I report the findings below.

I read a series of articles related to the goings of the UK housing market, the likely effects of the new Help To Buy scheme, the 10% increase in mean London house price over the last year, and employment statistics. I failed to reproduce some numbers cited in the economist (below). This post talks about this.

It all starts with this blog post on the economist:

http://www.economist.com/blogs/buttonwood/2013/09/house-prices

It talks about many things, amongst which employment and housing completions, and how the UK seems likely to be embarking on another round of debt-fueled growth.
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For loss of a better place, I'll store my recipe for homemade pizza dough here. This will make dough for 14 people.

2kg strong white flour (no self-raising or other extras) 4 sachets of yeast, 7g each (not the super fast bicarbonate stuff) Salt Sugar Olive Oil Water The main problem is to get the right consistency, i.e. how much water to add. You'll have to do some experiments here.

I've got some questions regarding this issue, maybe someone out there has a clue.

The Austrian contingent was 300 out of 1000 soldiers

source: http://www.guardian.co.uk/world/2013/jun/06/israel-angry-austria-golan-heights.

Inspired by the Institute of Fiscal Studies' "Where do you fit in" application, where people can find out their position in the UK's income distribution, I wanted to find out how the picture in London looks like. Quite different. If you are in a very high percentile nationwide, high incomes of mainly financial sector employees in London make sure that you find yourself a couple of ranks further down.
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I just pushed the most recent version of the PSID panel data builder introduced a little while ago. Got some user feedback and made some improvements. The package is hosted on github.

News:

I added a reproducible example using artificial data which you can run by calling 'example(build.panel)'. This means you can try out the package before bothering to download anything and it provides a simple test of the main function.
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I got intrigued by the numbers presented in this news article talking about the re-trial in the Amanda Knox case. The defendants, accused and initially convicted of murder, were acquitted in the appeal's instance when the judge ruled that the forensic evidence was insufficiently conclusive. The appeals judge ignored the forensic scientist's advice to retest a DNA sample, because

"The sum of the two results, both unreliable… cannot give a reliable result," he wrote.

I just finished reading the extraordinary book tomorrow's table by P. Ronald and Raoul Adamchak. (I linked to Ronald's blog). In this post I wanted to quickly redo a calculation Adamchak does on page 16, where he explains to his students how much energy is required to produce the fertilizer used to grow one acre of corn using conventional agriculture (as opposed to organic methods).

Economists frequently use public datasets. One frequently used dataset is the Panel Study of Income Dynamics, short PSID, maintained by the Institute of Social Research at the University of Michigan.

I'm introducing psidR, which is a small helper package for R here which makes constructing panels from the PSID a bit easier.

One potential difficulty with the PSID is to construct a longitudinal dataset, i.e. one where individuals are followed over several survey waves.
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I was recently asked by a friend whether it's worth to buy a house in the UK. That is, assuming they could put down the money, whether it was worth buying as opposed to renting. Apart from obvious things like the expected length of stay in one place, the interest on mortgages and how prices might develop and so forth, they were interested in particular in the amount of transaction costs they were likely to face: fees, taxes and so forth.

So Paul Krugman laments in his post that policy makers across Europe have blindly signed up to the "Austerity only" ticket. He cites some evidence which I find fairly convincing. I just want to raise the point that what he says cannot be used as a critique against the Monti government.

Basically what he's saying is that Monti was installed as a puppet of European creditor nations to make sure that austerity would be imposed and the country's government debt would be continued to be serviced.
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