Is New Orleans richer than inner London?
The usual suspects have been out in force over this article in the Sunday Business, which notes that"If New Orleans were to be in Britain, it would be by far its richest city as ranked by disposable income after tax and benefits. The average income in New Orleans before Hurricane Katrina was the equivalent of £19,980 (E29,570, $36,763) in 2003 - far higher than in inner London, Britain's richest area, where average incomes are £16,430."
Now it is well known that the US is, and has been for about 100 years, substantially richer than Britain on the measure of GDP per head. There are various arguments that this is misleading, insofar as it is a measure of average living standards, which I wont go into here. Furthermore clearly using a disposable income measure fails to account for the greater non-benefit tax-funded provisions in Britain which muddy this measure.
However inner London households, a lower disposable income than in New Orleans. Can it be true? No, basically. The US figures are done using 'Household Income', the British on a 'per capita' basis (though at the household level). This has the effect of almost doubling the US data.
Most of the rest of the article makes the same error.
posted by Matthew @ 9/16/2005 03:51:00 PM
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