More rationing

Generali

The reason for the median and mean moving apart is probably due to the gap between high and low incomes moving apart. Low incomes are bounded at 0 so the median will get pushed up.

ukcarper

Graham_Devon wrote: »

I'm not sure I understand your point?

Are you suggesting we should use a different wage index?

The only thing we can do is use mean full time male as they are the only figures available. Using Halifax they are about 4.3x so adjusting for divergence of mean and median they would be about 4.75x not the 7x often quoted.

Graham_Devon

ukcarper wrote: »

The only thing we can do is use mean full time male as they are the only figures available. Using Halifax they are about 4.3x so adjusting for divergence of mean and median they would be about 4.75x not the 7x often quoted.

Or 6.3x income if you look at median wage.

We have that data availiable, so we can certainly look at it. Which you prefer to sit behind is purely personal opinion.

I know that theres not much point in looking at the average person by using mean average. You may think differently.

ukcarper

Graham_Devon wrote: »

Or 6.3x income if you look at median wage.

We have that data availiable, so we can certainly look at it. Which you prefer to sit behind is purely personal opinion.

I know that theres not much point in looking at the average person by using mean average. You may think differently.

You can't compared median now to mean in the past its meaningless

The average house price was about £100k in 2002 and median earnings was £20.3k making earning ratio almost 5x. In 2002 the earnings ratio was at or about the long term average .

As they are now 6.3x that means that prices are about 25% above long term average which seems about right to me.

danothy

Graham_Devon wrote: »

We all know the average wage is not 36k for the majority. That's why we have median and mean wages. The majority earn an average of 26k.

It sounds like you are in fact describing the modal average, not the median. The majority have nothing to do with the median, it's just the value that lies at the half way point when you sort the dataset.

martinsurrey

Graham_Devon wrote: »

Or 6.3x income if you look at median wage.

We have that data availiable, so we can certainly look at it. Which you prefer to sit behind is purely personal opinion.

I know that theres not much point in looking at the average person by using mean average. You may think differently.

Rubbish,

now you're comparing MEDIAN wage to AVERAGE house price.

get us a figure for the MEDIAN house price (with a source) so we can have a fair comparison.

The MEDIAN house price will be a lot lower than the average house price, the £5m+ London market pulls the averages up.

FYI the average April figure at the land registry (all transactions) was £235k while the median was £175k.

Graham_Devon

martinsurrey wrote: »

Rubbish,

now you're comparing MEDIAN wage to AVERAGE house price.

get us a figure for the MEDIAN house price (with a source) so we can have a fair comparison.

The MEDIAN house price will be a lot lower than the average house price, the £5m+ London market pulls the averages up.

FYI the average April figure at the land registry (all transactions) was £235k while the median was £175k.

Right so why is it rubbish?

Median average wage = 26.6k.

Median house prices = 175k.

26.6 x 6.3 = £167,500. (which is the average on another index, but close enough to the 175k you gave).

So you've stated it's rubbish and then proved my rubbish point?

danothy

Graham_Devon wrote: »

which is the average on another index, but close enough to the 175k you gave

Isn't that a bit like demonstrating that 64/16 = 4 by cancelling the six on the top and bottom of the fraction?

wotsthat

Graham_Devon wrote: »

Median average wage = 26.6k.

Median house prices = 175k.

26.6 x 6.3 = £167,500. (which is the average on another index, but close enough to the 175k you gave).

That's a ratio of 6.6.

In 2002 Q4 (after a steep rise) using £120k and £20.3k it was 5.9 (less earlier in the year)

10% difference - without the context of a graph it's just two points in time. What's the long term average on this measure? Is the long term average meaningful or does it show, like other measures, that when comparing prices against wages they're either going up or down?

Without some more data you're p*ssing in the wind.

IveSeenTheLight

ukcarper wrote: »

I do believe Graham has a point and the difference between mean and median wage has increased over the years and median is a more useful figure. I also agree that prices in relation to earnings are high and if we had access to median wage figures they would show that they would be at there highest. But I fail to see why people keep trying to imply that they are 2 or 3x the average.

The thing to consider when looking at average wages, is that not everyone can afford.
Currently there is about 64% Owner Occupancy, theoretically meaning that (very roughly) only the top 64 percentile of earners have the opportunity to be home owners and as such this may be a reason why the mean was used as opposed to the median.

Of course if there was a significant increase in supply, then likely we would see an increase in owner occupancy and potentially drive prices lower such that a greater percentile of the population could afford to buy property