You aint seen nothing yet: Why house prices could fall another 20%

Really2

Graham_Devon wrote: »

Ok. Quick scenario.

99% of the population earn £25,000 a year.

1% of the population earns £5m a year.

Population is 60,000,000, but for ease, we'll say 600 (you can add all the 0's to the sums if you like).

Total earnings = £44,850,000

Average mean earnings of all workers = £77,750, even though, in this case of 600 workers, only 6 earn more than £25,000 a year.

Yes, a small minority (in this case 1%) can make a massive difference.

But the amount on £5m+ a year is more likely 0.0000001% of the population.
Pretty much my point.
More people sit in middle income jobs, the growth of that has pulled up the median wage not footballers.

Really2

Graham_Devon wrote: »

It's just an example of how averages skew.

Change the figures if you like. Outcome is the same.

We know the actual skew. It's about £36k mean, and £25k median.

I think the point being discussed was full time male, not all jobs.

Graham_Devon

Really2 wrote: »

But the amount on £5m+ a year is more likely 0.0000001% of the population.
Pretty much my point.
More people sit in middle income jobs, the growth of that has pulled up the median wage not footballers.

Hence why I stated "quick scanerio".

Do we have a problem with examples again?

As I stated to FTB, play around with the figures. It always ends up the same. The point was that more people are earning larger amounts each year, say celebs, footballers etc. I agree with this point, and it will pull the mean up, not by massive amounts, but all that was said is that the mean is being pulled up by these people. I agree.

Really2

It's the graham show again.
I disagreed with this

des_cartes wrote: »

It is well known that the multiples of the highest paid few percent (celebrities/footballers/bankers/ceo's) compared to the rest of the population have been increasing rapidly over recent years. You would not need many of these people to be included in the average wage calculations to skew them away from anything resembling reality for the vast majority (of potential house purchasors).

Your example was irelevent as it clearly overstated the amount of high earners.
Thus it is the middle classes that drag up the median, not those on very high wages as they are a very small minority.

The statement is tosh, the amount of people on high wages would have to be massive to drag it up so high to be significantly more than the average earner.

Indeed the average male fulltime wage is about the same as the median wage. Not all earners are potential house buyers. Part time shop work has never been a basis of buying a house, no matter how far you go back.

By graham.

Graham_Devon

Really2 wrote: »

It's the graham show again.
I disagreed with this



Your example was irelevent as it clearly overstated the amount of high earners.
Thus it is the middle classes that drag up the median, not those on very high wages as they are a very small minority.

By graham.

Ok, so you disagree that very high earners are pulling the mean wage up.

That's up to you. But I'd suggest you are wrong.

FTBFun

Graham_Devon wrote: »

It's just an example of how averages skew.

Change the figures if you like. Outcome is the same.

We know the actual skew. It's about £36k mean, and £25k median.

Of course it is:

99.99% of the population earn £25,000 a year. ( 59,994 x £25,000 = £1,499,850,000)

0.01% of the population earns £1m a year. (6 x £1 million = £6 million)

Population is 60,000,000, but for ease, we'll say 60,000 (lowest amount to get a whole number)

Total earnings = £1,505,850,000

Average mean earnings of all workers = £25,097.50

Not quite as fancy when you deliberately skew the figures, is it?

Graham_Devon

FTBFun wrote: »

Not quite as fancy when you deliberately skew the figures, is it?

You do realise thats not actually correct, and some people earn more than a million?

Oh but hang on, it's fine, as you want house prices to rise and have skewed it the other way. I better thank you!

I agree with everything you have said, btw. As I said, it's all playing with the figures. I do believe there are more people, as a percentage of the population earning very high amounts though. Footballers being one, their wages have gone insane and continue to do so. We've got a celebrity culture pumping out manufactured celebs going on to earn millions in months. Compare them to the 80's and it's simply a different world.

Out,_Vile_Jelly

As an aside to the statistical argy bargy; The Telegraph has been notably bearish on house prices for a while now, which does surprise me as I assumed its core readership would regard rises as a Jolly Good Thing.

Really2

FTBFun wrote: »

Of course it is:

99.99% of the population earn £25,000 a year. ( 59,994 x £25,000 = £1,499,850,000)

0.01% of the population earns £1m a year. (6 x £1 million = £6 million)

Population is 60,000,000, but for ease, we'll say 60,000 (lowest amount to get a whole number)

Total earnings = £1,505,850,000

Average mean earnings of all workers = £25,097.50

Not quite as fancy when you deliberately skew the figures, is it?

Now don't start putting logic to this. We all know it is better to knee jurk a response than to look in to it.

ukcarper

Graham_Devon wrote: »

You do realise thats not actually correct, and some people earn more than a million?

Oh but hang on, it's fine, as you want house prices to rise and have skewed it the other way. I better thank you!

I agree with everything you have said, btw. As I said, it's all playing with the figures. I do believe there are more people, as a percentage of the population earning very high amounts though. Footballers being one, their wages have gone insane and continue to do so. We've got a celebrity culture pumping out manufactured celebs going on to earn millions in months. Compare them to the 80's and it's simply a different world.

Lots of people earn less than £25k