Official Statistics
How accounting for differences in need for public services impacts UK income inequality statistics
Equivalisation is the process of adjusting income statistics to account for the fact that households of different compositions will require different incomes to have the same standard of living. This article builds on a method of equivalisation developed by Aaberge, Langorgen and Lindgren (2013), to account for the different needs for social-transfers-in-kind (such as education and healthcare) among different age groups. It compares this method of income equivalisation to the commonly-used modified OECD scale, and the effects it has on the income distribution and common measures of income inequality such as the Gini coefficient.
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Official statistics are produced impartially and free from political influence.
Published 12 October 2020