Most popular ⏷ Why are there no great Windows 10 apps? How moving the Capital helps Hartlepool. Gender bias calculator The Centre of the UK Defending Uber BusTracker Imagination not needed. Part 1. Imagination not needed. Part 2. Imagination not needed. Part 3. Why Birmingham fails Who is London? Innovation on buses. Heathrow

Housing ⏷ Counting households. 1. Counting households. 2. The housing market works (where we let it) Hexmaps Adonis is wrong on housing Car free Birmingham

Regional Growth ⏷ How moving the Capital helps Hartlepool. Industrial Strategy. Leeds Growth Strategy 1. Imagination not needed. Part 1. Imagination not needed. Part 2. Imagination not needed. Part 3. Inclusive growth. The BBC in Manchester What works (growth) North-South divide: we never tried Imitating Manchester Why Birmingham fails Who is London? Researching research Replacing UK steel The Economist & The North The State of the North, 2015 Move the Lords! Calderdale Digital Strategy Maths of inequality Income by MSOA Heathrow and localism The NorthernPowerhouse Centralism and Santa Claus Yorkshire backwards London makes us poor

Transport ⏷ The Centre of the UK Defending Uber BusTracker Train time map What works (growth) The Value of Time Innovation on buses. Heathrow 1975 WYMetro Plan

Politics & Economics ⏷ Fifa and the right In defence of the € GDP mystery Liberal protectionists 5 types of EU voter Asylum responsibilities STEM vs STEAM The Economist & Scotland BBC Bias? Northern rail consultation What holds us back? Saving the Union Summing it up

Positive ⏷ Bike Lights Playful Everywhere Greggs vs. Pret Guardian comment generator Consult less, do more! More things for Leeds! Cartoons PubQuest: Birmingham

Tech ⏷ Why are there no great Windows 10 apps? Tap to pay. Open Data in Birmingham Defending Uber BusTracker Train time map Building a TechNation How the UK holds back TechNorth GDS is Windows 8 OpenData at the BBC SimFlood SimSponge See me speak Digital Health Leeds Empties Leeds Site Allocations Building a Chrome extension I hate webkit Visualising mental health Microsoft's 5 easy wins Epson px700w reset Stay inside the Bubble

Old/incomplete ⏷ Orange price rises The future of University Cherish our Capital Dealing with NIMBYs Sponsoring the tube Gender bias calculator MetNetMaker Malaria PhD Symbian Loops Zwack Kegg Project The EU Eduroam & Windows 8 Where is science vital? The Vomcano 10 things London can shove Holbeck Waterwheel


Why a more unequal Manchester would mean a more equal UK.


The maths of inequality is hard. Intuitions that usually serve us well fail. Results we wouldn't expect are true. Here I use real UK data on the economies of Manchester and London to show one of the most important and most unexpected results.

First, some definitions. The smallest area for which the ONS reports mean household income is the MSOA. Each MSOA contains about 8000 people. Greater Manchester has 345. London has 983.

Below is a histogram of the mean household income (after housing costs have been paid) in Manchester (1) and London (2). The four poorest MSOAs in Manchester have an average disposable income below £250 per week. The two wealthiest MSOAs in London have an average disposable income above £950 per week.

In these graphs we see quite clearly that London is much wealthier than Manchester; the mean household income is over £500. In Manchester it is below £400.

For each wage distribution I have calculated the Gini index*. The higher the Gini index, the greater the inequality. London is significantly more unequal than Manchester. Manchester and London together (3) is more unequal still, with a Gini index of 15.2%.

An imaginary Manchester.

Let's imagine (4) a Manchester that is 35% richer, making its mean income equal to London's. But this Manchester is much more unequal; the poorest households are no better off than they were before and the richest households have nearly doubled their income. Our intuition would tell us that the combination of London as it is (3) and a much more unequal Manchester (4) would also be more unequal... right?

Wrong. By growing quickly, even if that leads to higher inequality, growth in Manchester would contribute to a great equalising of income across the two cities(5). Extend this metaphor carefully across the whole UK and it is a challenge to our intuitions about inequality.

It's not the result we expect but it's what the maths tells us is true. We see something similar in Germany.

All my workings are in this Excel spreadsheet if you want to check them. And please remember that this is a simplified example just to show that inequality isn't always what it seems. The principle holds for more complicated systems but the details that I've left out here always matter.


ps 1. in advance of the complaints that I am confusing wealth with wages by using the terms 'poor' and 'rich'. I know. It is a deliberate choice. I find it results in fewer complaints and less misunderstanding than the other options.

* ps 2. These Gini indexes are calculated for a set of large-area averages and are not comparable with Gini indexes calculate for a whole population as usually reported for a country.


blog comments powered by Disqus