Household Income

Economic data provides information about the ability of households to afford housing, and a basis for forecasting future demand trends in a local government area. Household incomes are more relevant than individual earnings when determining affordability and future housing demand. Many countries (e.g. USA, New Zealand) have income data in their census. The UK does not and this has been major driver of surveys as well as other ways of ‘modelling’ income (e.g. Bramley 2006b).

Data on occupations, employment trends (including full- and parttime employment) and workforce participation rates can also be important indicators of the socio-economic status of an area. In undertaking this analysis, it is necessary to distinguish between cyclical changes in employment associated with the business cycle and structural changes resulting from the permanent decline of a particular industry which is important to the regional or local area.

For instance, in many nations there has been continued shedding of manufacturing jobs, while financial, information and service sectors of the economy have grown. Spatial disparities in growth arise within and between regions as a consequence of these processes. The process just described can also lead to more inequality/dispersion in household incomes within an area, between favoured occupations and individuals and others. Also, demographic trends may widen inequalities, particularly between households with no-one working; households with one worker (including by definition all singles and lone parents); and two- worker households.

An affordability analysis can be undertaken using data, or proxy data, on median incomes against median housing costs. More precise measures report on actual housing cost payments made by households as a proportion of incomes, such as the comprehensive surveys of household income and housing costs undertaken by central governments, although this information is often only available at aggregate or regional level.

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