Income inequality

 

Negative change

Between 1988 and 2015, income inequality between households with high incomes and those with low incomes widened

  • Image, income inequality
    • In 2015, the disposable income of a high-income household was over two-and-a-half times larger than that of a low-income household.
    • Between 1988 and 2015, the income inequality ratio increased from 2.24 to 2.61.  

    View source data

    The source data for this indicator is available from Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2015 on the Ministry of Social Development website.

    Definition and measure

    The degree of income inequality is often regarded as an indicator of the fairness of the society we live in. Households with low incomes have fewer options for meeting the same economic needs than those with relatively high incomes. This indicator measures income inequality by comparing the ratio of high-income households to low-income households. The higher the ratio, the greater the level of inequality.

    The income inequality indicator uses a ratio calculated by dividing individuals into 100 ranked groups (percentiles) on the basis of their household disposable incomes.

    Incomes are before housing costs, and after adjusting for household size and composition.

    The first percentile is the lowest income group. The indicator compares the incomes of those in the 80th percentile, a relatively high income group, with those in the 20th percentile, a relatively low income group. 

    Technical changes since 2010

    Since we published Key findings on New Zealand's progress using a sustainable development approach: 2010, the Ministry of Social Development has revised the practice of reporting annual income inequality figures over the period between 1988 and 1998. The loss of data for some of the intermediate years does not compromise the usefulness of this information.

    A line graph replaces the column graph previously used in Key findings on New Zealand's progress using a sustainable development approach: 2010, to make it easier to interpret the trend.

    Previous publications

    Key findings on New Zealand's progress using a sustainable development approach: 2010
    Measuring New Zealand's progress using a sustainable development approach: 2008
    Key findings on New Zealand's progress using a sustainable development approach: 2008

    Page updated September 2016

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