Estimating the Distribution of Income in New Zealand’s North Island

Income distribution varies greatly in all economies because, at any point in time, some households and individuals earn more while others earn relatively less, which results in different income distribution. In fact, the “build-up” approach to income is usually adopted where the income of individuals is explored first and then followed by identifying the household income (Nolan, Salverda, and Smeeding 2). In this case, factors that influence the individual’s income, such as workforce returns, are traced through the income of the household, which is, in turn, influenced by wider aspects of social, demographic, and government policies. Therefore, the concept of estimating the income distribution in New Zealand is the main concern raised for investigation.

It is worth noting that various approaches can be used when a particular company is interested in estimating income distribution in New Zealand’s North Island. In essence, the most appropriate tactic is to consider the last published data and information on wealth distribution and study the most recent data in the market, which will offer an up-to-date picture of the distribution of wealth today (Johnson 1). In addition, the firm would also examine the income distribution at the household, individual, and national levels. Through consideration of data from various sectors, the company will find the total income of the households, which will be derived after totaling the annual personal income for the adults (before tax) from all the sources that are received by the households and “equivalised” for the size of the households.

By and large, the aspect of estimating income distribution would require the firm to visit public sources of data which include income tax returns from the Inland Revenue Department, Quarterly Employment Surveys published by the New Zealand Income Survey, and household and individual statistics from the estimates of national income sector and censuses. In fact, those government sectors provide reliable estimates of income shares of various groups in society, which can be used for an analysis to estimate the income distribution in New Zealand’s North Island.

 

Works Cited

Johnson, Alan. Recent Wealth and Income Trends in New Zealand, The Salvation Army Social Policy & Parliamentary, N.p. 2015, pp. 1-27.

Nolan, B., Salverda, W. and Smeeding, T. The Oxford Handbook of Economic Inequality. Oxford: Oxford University Press. 2011.