Monday, April 28, 2014

Not all income inequality is the same: The College Town Edition.

A nice example that illustrates the maxim "There are lies, damn, lies, and Statistics".

Five Thirty Eight (Ben Casselman) has a nice posting on how income inequality measurements can present a picture that is not a true reflection of the actual situation.

College Towns with a high number of college students are a prime example.

This graphic shows how misleading the measure of income inequality in some of the biggest college towns in the US can be.

The key columns to look at are "Students Included" and "Students Excluded" from the measurement. As you can see when students, who may be income poor but not cash or resource poor, are excluded from the measurement the areas "Median Household Income" rises significantly.

I encourage you to read the whole article.
casselman-College-Inequality-table (1)
Source: Five Thirty Eight (Ben Casselman)

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