Income inequality by borough

What does this chart show?

This graph shows the mean income in each borough as a proportion of the median income in each borough*.

The higher this proportion is, the higher that the level of income inequality is in that borough. A figure of 100% would indicate that incomes below and above the median income are evenly distributed. Every borough has a figure above 100%, meaning that most people earn less than the mean income in every borough. Mean income is pushed up by households with high incomes and incomes which are unevenly distributed.

Kensington and Chelsea has a ratio of 209% which is significantly higher than any other borough. The next highest rates are in Westminster (170%), Camden (155%), Hammersmith & Fulham (144%) and Richmond (143%). A very similar list of boroughs are at the most expensive end of the Rents and Affordability data.

Barking and Dagenham has the lowest income inequality according to this measure – though many boroughs in the bottom half have similar figures. The mean income in Barking & Dagenham as a proportion of the median is 116%. Greenwich, Hounslow, Lambeth and Harrow are in the middle of the distribution, and their figure is 126% - just 10 percentage points higher than Barking & Dagenham.

This measure differs from pay inequality because it looks at household income rather than hourly pay. This is the total income of each household so it includes all the earnings of those in the household, as well as other sources of income such as benefits. The measure of pay inequality is based on hourly pay and so does not take into account household composition or other sources of income. 

*The mean refers to the figure which would be reached by adding up all of the incomes in the borough, and dividing that by the number of households in the borough. The median refers to the level of household income exactly in the middle of the range in the borough (so there are exactly the same number of households who earn more than the median as there are households that earn less).


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