The Unassuming Economist

From the US Congressional Budget Office (CBO):

In 2014, household income was unevenly distributed: Households at the top of the income distribution received significantly more income than households at the bottom of the distribution. According to the Congressional Budget Office’s estimates:

• Average income among households in the lowest quintile (or fifth) of the income distribution was about $19,000.

• Average income among households in the highest quintile was about $281,000.

Furthermore, within the highest quintile, income was highly skewed toward the very top of the distribution: Average income among households in the bottom half of the highest quintile (the 81st to 90th percentiles) was about $151,000; average income among the 1.2 million households in the top 1 percent of the distribution was about $1.8 million.

Those amounts include social insurance benefits (such as benefits from Social Security and Medicare) but exclude the effects of governmental policies that directly affect the distribution of household income either through means-tested transfer programs or through the federal tax system.

Means-tested transfers are cash payments and in-kind benefits from federal, state, and local governments that are designed to provide assistance to individuals and families with low income and few assets. They include benefits from government assistance programs such as Medicaid and the Children’s Health Insurance Program (CHIP), the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp program), and Supplemental Security Income (SSI). Federal taxes consist of individual income taxes, payroll taxes, corporate income taxes, and excise taxes. Means-tested transfers and federal taxes cause household incomes to be more evenly distributed. In 2014, those transfers and taxes:

• Increased income among households in the lowest quintile by $12,000 (or more than 60 percent), on average, to $31,000.

• Decreased income among households in the highest quintile by $74,000 (or more than 25 percent), on average, to $207,000.

CBO has analyzed the distribution of household income and federal taxes on a recurring basis for more than 30 years. For this report, the agency focused on the distribution of household income in 2014 because that is the most recent year for which relevant data were available when the analysis began. In addition, CBO assessed trends in household income, means-tested transfers, federal taxes, and income inequality over a 36-year period, beginning in 1979 and ending in 2014.

Read the full report here.

From an interview article by Damian Carrington:

“Ashattering collapse of civilisation is a “near certainty” in the next few decades due to humanity’s continuing destruction of the natural world that sustains all life on Earth, according to biologist Prof Paul Ehrlich.

In May, it will be 50 years since the eminent biologist published his most famous and controversial book, the Population Bomb. But Ehrlich remains as outspoken as ever.

The world’s optimum population is less than two billion people – 5.6 billion fewer than on the planet today, he argues, and there is an increasing toxification of the entire planet by synthetic chemicals that may be more dangerous to people and wildlife than climate change.

Ehrlich also says an unprecedented redistribution of wealth is needed to end the over-consumption of resources, but “the rich who now run the global system – that hold the annual ‘world destroyer’ meetings in Davos – are unlikely to let it happen”.

[…]

More of Paul and Anne Ehrlich’s reflections on their book are published in The Population Bomb Revisited.”

From Federal Reserve Bank of St. Louis:

“Historically, the cost of buying a house has been positively correlated with the percent of households that own their home. During 1996 to 2006 in the United States, both the price of houses and the homeownership rate increased. This increasing trend ended abruptly with the global financial crisis, which saw house prices plunge and drove homeownership rates to historically low levels. If homeownership became less attractive in the wake of the financial crisis, we might expect both prices and homeownership to decrease. Similarly, if the current increase in house prices were driven by people buying homes to live in, we might expect the homeownership rate to increase along with prices. However, recent evidence shows that house prices and homeownership are diverging.

The graph shows that, in the wake of the financial crisis, house prices declined by over 25 percent, from an index value of around 180 to around 135. The homeownership rate also dropped from a high of over 69 percent to just over 63 percent, its lowest level since 1980. Unlike in the past, the homeownership rate continued to fall even after house prices began to recover.

Several factors could be driving the decoupling of house prices and the homeownership rate. From the housing supply side, there is a trend toward decreased construction of starter and mid-size housing units. Developers have increased the construction of large single-family homes at the expense of other segments in the market. This limited supply, particularly for starter homes, could result in increased prices for those homes and fewer new homeowners.”

 

Continue reading here.

The IMF’s latest report on Namibia says that:

“The rapid rise in housing prices and household debt, banks’ large exposure to mortgages, and banks reliance on wholesale funding are sources of concern. A major decline in real estate prices would adversely affect bank capital and profitability.”

 

HT: Carpe Diem. From the article “This Chart Shows the Slow Death of the NYC Yellow Taxi” by Nick Lucchesi:

“A new chart released this week shows that the New York City taxi cab is not only an endangered species but that its days are numbered. Today, there are 65 percent more ride-hailing trips than taxi trips in New York City (see chart above).

Genius employee and data-visual enthusiast Todd Schneider pulled from the reams of data released by the New York City Taxi & Limousine Commission each month that shows fares by car type — taxi or ride-hailing service. His analysis shows the tide has turned: At the end of 2017, all monthly ride-hailing pickups (Uber, Lyft, Juno, Via, Gett) numbered 15 million, while taxi pickups numbered less than 10 million. As use of yellow taxis (which primarily serve Manhattan) and green taxis (which primarily serve the other four boroughs) has been on the decline, there’s been a sharp increase in the use of ride-hailing apps.

The chart above shows the data behind one of the most dramatic changes in America’s largest city over the past five years. The way people in New York (tourists and locals alike) get around has flipped, and it doesn’t show any sign of stopping, according to Schneider’s analysis.”