Living Standards and Poverty in the Regions by raz34238

VIEWS: 9 PAGES: 22

									Living Standards and Poverty in the
             Regions

              David Phillips
      Institute for Fiscal Studies
             11th June 2008
           What‟s coming up?

• Living Standards in the Regions


• Poverty in the Regions

• How things change when we use regional price levels
The Regions of the United Kingdom

             • Nine English Regions
                • North East, North West,
                  Yorkshire and Humber, East
                  Midlands, West Midlands, East
                  of England, London, South
                  East and South West.

             •   Wales
             •   Scotland
             •   And Northern Ireland
             •   Twelve „regions‟ altogether.
       Regions and Price Levels

• Prices differ across regions.
   • Housing etc expensive in London and the South
     East
• Affects real purchasing power in different parts of the
  country.
   • “Real” income higher where low prices
   • “Real” poverty lower where low prices
• Regional prices may change our view about living
  standards and poverty rates across the UK.
                     But…

• No consistent regional price series.
   • The ONS has produced only two recently: 2003
     and 2004. We use the latter years regional price
     data LATER.
• We therefore use national prices for most of this
  analysis.
• Might lead to misleading estimates of real incomes
  and overestimation of poverty rates but should
  capture relative trends over time.
        Median Income (BHC)

• Same measure of income as usual.
   • Household income after taxes and benefits, but
     before housing costs and adjusted for household
     size.
• Use two year averages.
• UK-wide median = 100.
   • Bigger than 100 means higher than UK
   • Lower than 100 means lower than UK
Real Income (2005-06 and 2006-07)
         Region         Relative Income
       South East             116.6
         London               112.7
     East of England          107.5
       South West             100.8
        Scotland               98.6
      East Midlands            95.0
        Yorkshire              93.7
         Wales                 93.1
       North West              92.9
       North East              90.9
     Northern Ireland          90.9
     West Midlands             90.8

                        Source: HBAI Data and authors‟ analysis
Real Income Growth (1996-97 to 2006-07)
            Region        Percentage Growth
           London                 28%
          North East              26%
          South West              24%
           Yorkshire              23%
            Wales                 22%
           Scotland               21%
        East of England           20%
          North West              18%
        East Midlands             18%
          South East              18%
        West Midlands             14%


                           Source: HBAI Data and authors‟ analysis
          Mean Income (BHC)

• Similar pattern except London now has the highest
  incomes by a considerable margin.
   • Indication of the high levels of inequality in London
     with a sizeable „very rich‟ population.
    Defining and measuring poverty

• We use the same measure of poverty as usual.
   • Household income below 60% of the national
     median, AHC and BHC.
• Because of small samples at the regional level we
  use two-year averages.
• We only report poverty rates for the population as a
  whole as sample sizes for sub-groups are small at
  the regional level.
Poverty Rate (2005-06 and 2006-07)
         Region         Relative Poverty (AHC)
         London                 27.5%
     West Midlands              24.4%
       North West               24.0%
       North East               23.4%
         Wales                  22.5%
      East Midlands             22.5%
        Yorkshire               22.2%
     Northern Ireland           19.9%
       South West               19.6%
        Scotland                19.3%
     East of England            18.7%
       South East               18.3%

                           Source: HBAI Data and authors‟ analysis
Change in Poverty (1996-97 to 2006-07)
           Region        Change in Poverty
         North East             -6.3%
           Wales                -4.9%
          Scotland              -4.6%
         South West             -4.0%
          Yorkshire             -3.5%
          London                -2.8%
       East of England          -2.6%
         North West             -2.0%
         South East             -1.7%
       East Midlands            -1.4%
       West Midlands            -0.0%



                          Source: HBAI Data and authors‟ analysis
       Regional Poverty (BHC)
• Using incomes measured BHC there are a few
  differences
   • Highest in the West Midlands at 20.8%
   • Mid-table for London at 17.2%
   • Lowest in the South East at 13.6%
• The changes in relative rankings over time are similar
  to AHC poverty, although poverty has risen slightly
  for a few regions (North West, East Midlands, West
  Midlands and the South East).
Using Regional Prices
  Regional Price Indices
    Region            Price Level
    London                109.7
  South East              105.3
  South West              101.3
    Eastern               101.1
 West Midland             97.8
 East Midlands            97.4
  North West              96.9
Northern Ireland          95.8
   Yorkshire              94.2
   Scotland               94.5
  North East              94.2
    Wales                 93.1

                   Source: Office of National Statistics
Median Income in 2004-05 (BHC)
       Region         National Prices
     South East            £429
       London              £415
   East of England         £396
     South West            £377
      Scotland             £371
    East Midlands          £355
     North West            £352
   West Midlands           £347
      Yorkshire            £342
   Northern Ireland        £341
       Wales               £339
     North East            £330

                                    Source: HBAI Data and authors‟ analysis
Median Income in 2004-05 (BHC)
       Region         National Prices         Regional Prices
     South East            £429                      £407
       London              £415                      £378
   East of England         £396                      £392
     South West            £377                      £372
      Scotland             £371                      £393
    East Midlands          £355                      £364
     North West            £352                      £363
   West Midlands           £347                      £355
      Yorkshire            £342                      £363
   Northern Ireland        £341                      £356
       Wales               £339                      £364
     North East            £330                      £350

                                    Source: HBAI Data and authors‟ analysis
Median Income in 2004-05 (BHC)
        Region           Regional Prices
    South East (0)            £407
     Scotland (+3)            £393
  East of England (0)         £392
      London (-2)             £378
   South West (-1)            £372
   East Midlands (0)          £364
      Wales (+4)              £364
    Yorkshire (+1)            £363
    North West (-2)           £363
  Northern Ireland (0)        £356
  West Midlands (-3)          £355
    North East (0)            £350

                                     Source: HBAI Data and authors‟ analysis
Poverty in 2004-05 (BHC)
    Region         National Prices
  North East           21.6%
Northern Ireland       20.6%
West Midlands          19.7%
    Wales              19.3%
 East Midlands         18.9%
  North West           18.4%
    London             18.2%
   Yorkshire           18.0%
   Scotland            17.2%
  South West           14.1%
East of England        13.8%
  South East           12.2%

                                 Source: HBAI Data and authors‟ analysis
Poverty in 2004-05 (BHC)
    Region         National Prices         Regional Prices
  North East           21.6%                     18.0%
Northern Ireland       20.6%                     18.4%
West Midlands          19.7%                     19.0%
    Wales              19.3%                     15.3%
 East Midlands         18.9%                     18.2%
  North West           18.4%                     16.9%
    London             18.2%                     22.6%
   Yorkshire           18.0%                     15.1%
   Scotland            17.2%                     14.9%
  South West           14.1%                     15.5%
East of England        13.8%                     14.6%
  South East           12.2%                     14.9%

                                 Source: HBAI Data and authors‟ analysis
  Poverty in 2004-05 (BHC)
      Region            Regional Prices
    London (+6)             22.6%
West Midlands (+1)          19.0%
Northern Ireland (-1)       18.4%
East Midlands (+1)          18.2%
  North East (-4)           18.0%
  North West (0)            16.9%
  South West (+3)           15.5%
     Wales (-4)             15.3%
   Yorkshire (-1)           15.1%
   Scotland (-1)            14.9%
  South East (+1)           14.9%
East of England (-1)        14.6%

                                    Source: HBAI Data and authors‟ analysis
                 Summary
• Median income
   • highest in the South East and London
   • lowest in the North East, Northern Ireland and
     West Midlands.
• Poverty
   • highest in the North West, West Midlands (BHC)
     and London (AHC).
   • lowest in South East
• Accounting for cost of living has big impact on
  relative rankings in terms of both median income and
  poverty (e.g. London and Wales)

								
To top