Income Inequality Index | Morning Consult and Axios
Methodology
The Morning Consult/Axios Inequality Index relies on Morning Consult’s proprietary data from four distinct surveys with over 100,000 responses.
Index Calculation:
1. Convert daily and weekly values to monthly values. The index averages weekly values for the lost pay/income tracker and daily values for the Index of Consumer Sentiment to produce monthly values.
2. Convert Index of Consumer Sentiment values to net percentages. The Index of Consumer Sentiment is on a scale from 0 to 200 while the other three series are percentages that run from 0 to 100 percent. This difference in units prevents direct comparison of the four components and limits the ability to combine them into a single inequality index. In order to address this issue, the ICS values have to be reduced by 100 and divided by 100 so that they reflect net percentages.
3. Calculate each of the four components. Each of the component series is calculated by taking the standard deviation of the three values across the income spectrum. The resulting values represent the degree of variation or dispersion from the mean among low-, middle- and high-income adults. The higher the component value, the greater the inequality across income groups.
4. Calculate the overall index. The Morning Consult/Axios Inequality Index is an average of the four component values. The higher the index value, the greater the inequality across income groups.
FAQs
1. What is the Morning Consult/Axios Inequality Index?
The Morning Consult/Axios Inequality Index measures economic inequality across income groups on a monthly basis.
2. How does the Morning Consult/Axios Inequality Index define economic inequality?
The Morning Consult/Axios Inequality Index defines economic inequality in terms of consumer confidence, employment outcomes, employment expectations and financial vulnerability, each of which plays an equally important role in capturing the economic experiences of adults across the income spectrum.
3. Why is it important to measure economic inequality?
Traditional economic indicators provide limited insight into the ways in which different groups of adults are experiencing the economy, thereby increasing the risk of economic policies leaving behind certain groups of individuals.
Persistent or increasing economic inequality casts doubt on the fairness of America’s economic system and undermines the sustainability of economic growth.
4. How does the index compare to the Gini coefficient?
Unlike the Gini coefficient, the Morning Consult/Axios Inequality Index does not measure the distribution of income or wealth in the country. Rather, it measures the impact of income differences on driving differences in economic experiences.
5. How are Morning Consult and Axios planning on measuring and analyzing other forms of economic inequality not included in the index?
Morning Consult and Axios are both committed to measuring and analyzing additional forms of economic inequality not explicitly included in the index, including issues related to wealth disparities and intergenerational economic mobility. These additional forms of economic inequality exist not only across income groups, but also by race, ethnicity, gender, educational attainment and parental status, to name a few. Future monthly releases will highlight some of these additional disparities in economic experiences via special reports and analysis.
6. How is the data for the Morning Consult/Axios Inequality Index collected?
The Morning Consult/Axios Inequality Index relies on Morning Consult’s proprietary survey research capabilities to collect the four data series that feed into the index.
7. How should the index values be interpreted?
The values of the Morning Consult/Axios Inequality Index answer the question “how differently are U.S. adults with annual incomes below $50,000, between $50,000 and $100,000 and over $100,000 experiencing the economy?” The higher the index value, the more differently adults across the income spectrum are experiencing the economy.
8. How often will the index be published?
The Morning Consult/Axios Inequality Index will be published on a monthly basis during the last two weeks of the month.
About Morning Consult
Morning Consult is a global decision intelligence company changing how modern leaders make smarter, faster, better decisions. The company pairs its proprietary high-frequency data with applied artificial intelligence to better inform decisions on what people think and how they will act. Learn more at morningconsult.com.
Email [email protected] to speak with a member of the Morning Consult team.
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