Modelling local income distributions in Britain

There is a lack of reliable and detailed official data on incomes at local level in Britain. Local estimates of the structure and distribution of household incomes would have a range of uses for policy, planning and market research, while contributing to understanding of national developments in poverty and wealth. A method of deriving such estimates is described, involving the disaggregation of the national Family Expenditure Survey and the projection of distributions down to the local level using Census and other data on household composition and factors associated with economic activity and income. The assumptions and calibration of this model are discussed and its performance assessed against various alternative regional and subregional estimates. The geographical pattern of projected incomes is described in terms of regions and types of districts, revealing a wider inequality of income than suggested by official statistics. The conclusions point to various ways in which the model may be improved and used in different ways.