Summary
We have measured the average gross and net annual household income across a selected postcode.

Definition
Income is the measure of how much money a household makes in a year before tax (known as ‘gross annual income’) and after tax (known as ‘net annual income’).

Why the metric matters from a commercial inhabitant’s perspective

Income data can be useful to those who are interested to find out how income is distributed throughout their borough, and across all of London more generally. For residential inhabitants, knowing the income levels of an area can help you to see how similar or different your income is to people within a given area.

Income level data can also provide further insight. If you can see the (useful) distinction between effects that flow from the characteristics of the population such as income, age and employment status, and those that flow from area effects, being the characteristics of the place itself (such as environmental pollution, poor standards of public service provision, features of the built environment, and/or the physical isolation of a neighbourhood), several London-centric studies have concluded that when it comes to determining how people perceive how attractive a neighbourhood is, area effects rarely impact on perception.

However, population characteristics, most notably income, are a primary factor that affects how people perceive how attractive a neighbourhood is, without very local income data most people have few chances to understand income level distributions beyond simple high and low categorisations, limiting their ability to discover new neighbourhoods. As most people seek out neighbourhoods that exhibit both levels of income that are enabling as opposed to alienating, together with higher levels social capital as ordinarily associated with neighbourhoods with combining our demographic data with income levels should allow people to refine their preferred area choices.

Why the metric matters from a residential inhabitant’s perspective

Income data can be useful to those who are interested to find out how income is distributed throughout their borough, and across all of London more generally. For residential inhabitants, knowing the income levels of an area can help you to see how similar or different your income is to people within a given area.

Income level data can also provide further insight. If you can see the (useful) distinction between effects that flow from the characteristics of the population such as income, age and employment status, and those that flow from area effects, being the characteristics of the place itself (such as environmental pollution, poor standards of public service provision, features of the built environment, and/or the physical isolation of a neighbourhood), several London-centric studies have concluded that when it comes to determining how people perceive how attractive a neighbourhood is, area effects rarely impact on perception.

However, population characteristics, most notably income, are a primary factor that affects how people perceive how attractive a neighbourhood is, without very local income data most people have few chances to understand income level distributions beyond simple high and low categorisations, limiting their ability to discover new neighbourhoods. As most people seek out neighbourhoods that exhibit both levels of income that are enabling as opposed to alienating, together with higher levels social capital as ordinarily associated with neighbourhoods with combining our demographic data with income levels should allow people to refine their preferred area choices.

General commentary

Income has been shown to have a direct effect on many other factors, such as status, class, health, lifespan, and education. Income does not, however, have such an obvious effect on our happiness. Whilst the majority of individuals report an increase in happiness when their income increases, this is only temporary.

Over time, one gets used to the new standard or living and once again begin to aspire towards the next stage in their career and develop new tastes for higher quality goods and services: if people see that better things are available, they will want them. This is further confounded by social comparison - people generally tend to evaluate themselves based on those they most frequently spend time with - hence the old adage “keeping up with the joneses” - referring to the need to compete with one’s neighbours.

Whilst incomes have risen by over 300% in the last four decades, many of the same jobs still remain. This is because efforts of consumers have been focused on strengthening purchasing powers rather than education or personal improvement. For example, a waiter at present may earn significantly more money than a surgeon did in the 70s, but they are still a waiter.

History

Incomes throughout London have changed quite significantly over the past six decades. At the end of WWII and well into the 1970s, London experienced substantial economic growth, with citizens across almost all social classes and income brackets prospering. Furthermore, the income gap between those at the top of the income ladder and those in the middle and bottom did not change significantly over this period.

As the 1970s passed, economic growth began to slow and the income gap between rich and poor began to widen. Those at the top of the income ladder continued to enjoy strong economic growth, however, growth for those with average and below incomes declined sharply. This trend has continued over the last 40 years, with the share of wealth held by the top 1 percent of earners now being more than twice as large of a share of the nation’s wealth as the bottom 90 percent of earners!