Thursday 21 May 2009

Fun with numbers

Maximum allowable claim for an MP's second home in 2007-08: £23,083 (tax-free)

Median male full-time earnings in the year to April 2008: £27,092 (liable to PAYE of £6,951, so net earnings £20,141)

6 comments:

manwiddicombe said...

Not being a statistician I may be wrong in this assumption but .. .. .. wouldn't the modal average earnings be a better indicator than the median or mean?

Both the mean and the median are skewed towards a higher figure due to the wide range of salaries on offer.

Mark Wadsworth said...

CFF, agreed that the arithmetic mean overstates salaries, but the median was the only one to hand and is IMHO the best guide anyway.

manwiddicombe said...

With a little searching (it seems that the figures on income distribution are a little reclusive) I found this page from the IFS. If you click through the two pages of data entry you'll get to see the graph of distribution and how it is weighted

Mark Wadsworth said...

CFF, can you find a better figure for median or modal post-tax income?

manwiddicombe said...

I saw a gross figure of approx £15k pa quoted in an article on the BBC site but can find no hard evidence to back it up.

The reason that I've been persisting in trying to find it is that the modal income is even lower and therefore makes the comparison to the MPs expense allowances, and indeed many comparisons with higher wages, even more startling.

IMO the reason that the modal income is not widely reported is that it would reflect badly on whoever is the government of the day.

I'm sorry if I've come across as accusatory .. .. .. I was hoping that you might know of a source for the figure as you seem quite handy with numbers! I'll desist now.. .. .. ..

Mark Wadsworth said...

CFF, that's the problem here, you can choose income of male or all workers; full or part time; pre- or post-tax; pre- or post-benefits; and then choose individual income or household income; possibly using 'equivalised' incomes; using mean, modal and median figures etc. This probably gives us a range between £10,000 and £40,000.

So there probably is a figure somewhere of £15,000, which might be e.g. modal gross employment income, which is why I gave MPs the benefit of the doubt and used the highest reasonable comparative (male full time earnings) but even THAT figure is less than the second home allowance, if you see what I mean.