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Monday, November 21, 2011

Income - Part 2

In comments, Steve asked for a graph of the difference between median and mean income, "y axis appropriately scaled so we can see when the big median/mean divergences happened."  Happy to oblige.  In the original graph, the difference line was dwarfed by the mean and median values.

Zeroing in on the difference, we see that it grew from about $3500 (constant 2008 dollar basis) to a peak of $20,192 in 2006.  It then backslid to $18,113 in 2008.  Other dips occur in 1958-9, 1975-6, 1991-2, and 2002: each at or within a year of a major recession - quite a painful way to strike a feeble blow for equality.  By this criterion, the entire 21st century thus far has been an economic doldrum.  I hope you didn't need this data bit to be so informed.

I had Excel throw an exponential best fit line on the dataset.  With some wiggles, it's not a bad match, overall, with R^2 = .9617.  The exponent is .0326.

The biggest gain in the spread came, of course, in the Reagan - Bush I years, growing from $7837 to $15057, a gain of 92% over 12 years.   During the Clinton term it increased to $18806, or 24.89% during those 8 years.

For what it's worth, here is a plot of year over year % change in the difference.

This is color coded by President's party, from year 2 of an incumbent party's term to year 1 of the new party's term, when there is a change.  I figured that the first year of any President's term is based on the preceding executive's budget and policies, and it takes a while to implement new policies.   Note also that there is a spike in the first year of each new democratic Prez, and a drop in year 2.  This is what made me think to code it this way.

Also included are an average for the entire set, 2.7%, in purple, a 5 year moving average, in yellow, and term averages from year 2 to term end + 1 for each president.  Kennedy-Johnson and Nixon Ford are taken as single administrations; Reagan and Bush I are separated.  Dem administration averages typically hug the long average line, while Rethug administrations run mostly above it.  The exceptions are Truman and Shrub, both falling far below the long average line.

The single big spike is the difference growth from 1992 to 1993, when mean income recovered a full year ahead of median income, as seen in the original graph.

This data set ends in 2008, so none of the results of Demopublican president B. Hoover Obama are indicated.

1 comment:

Steve Roth said...

Thanks! What I asked for and far more!