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Appendix 1  Gross income and disposable income

Two other commonly-reported measures of household income can be calculated in this study. Gross income is the cash income that households receive from all sources, namely their market income plus any cash benefits they receive from the government in the form of Superannuation and social welfare benefits. Appendix Figure 1 shows that gross income declined, on average, for households in deciles 2 to 7, but increased, in particular, for households in decile 1 and decile 10.

Appendix Figure 1 – Average gross income by income decile, 1987/88 and 1997/98
Appendix Figure 1 – Average gross income by income decile, 1987/88 and 1997/98.

Disposable income is what households receive in their hands to spend on goods and services, namely their gross income minus the tax they pay on their various sources of income. This is shown in Appendix Figure 2. Households in most, but not all, deciles experienced an increase in disposable income, on average, between 1987/88 and 1997/98.

Appendix Figure 2 – Average disposable income, by income decile, 1987/88 and 1997/98
Appendix Figure 2 – Average disposable income, by income decile, 1987/88 and 1997/98.

Mowbray (2001) also calculates household disposable incomes by decile for 1987/88 and 1997/98, based on the HES, and it is a useful check on the results of this study to compare them with the corresponding figures from Mowbray. The main differences between the studies are that Mowbray equivalises income and uses different weightings. Her results are shown in Appendix Figure 3. These show a very similar pattern to the results in Appendix Figure 2.

Appendix Figure 3 – Average equivalent disposable income, by income decile, 1987/88 and 1997/98, from Mowbray
Appendix Figure 3 – Average equivalent disposable income, by income decile, 1987/88 and 1997/98, from Mowbray.
Source: Mowbray (2001), Table A10.
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