The new study by Experian confused what constitutes the real 'middle Britain', reports Chris Tarquini.
Articles published on Labour List and in The Guardian today discuss a study by self-described “global services information company” Experian and the release of their ‘Uncovered: The Real Middle Britain’ report. The study claims to have painted a “revealing new picture of the most talked about demographic in Britain today” amongst constant talk of the “squeezed middle“.
Amongst its findings are that the average household income in its ‘Middle Britain’ demographic is £47,300, around 10 per cent higher than that outlined by the Office for National Statistics, which leaves households better off financially even though outgoings are shown to be higher than the ONS numbers.
Using Mosaic, “which uses over 400 social and economic variables to better understand consumers”, and representing 13.1 million people or almost a quarter of the population (22%), the study has a much broader definition of what constitutes the ‘middle’ in Middle Britain.
One area of concern outlined in the study is the fact that ‘Middle Britain’ is likely to see its outgoings increase faster than the national average and the group is ‘likely to be more exposed than the general population to increases in mortgage interest rates over the coming years.’
Speaking to Left Foot Forward, James Plunkett from the Resolution Foundation gave his analysis of the findings:
“The information on prices will be particularly interesting for anyone concerned about recent trends in living standards. Even though the group Experian are talking about has an average income solidly above the national average, they’re already reporting real anxieties about the rising cost of living.
“For the Government that sets a difficult context for the coming year, which will see a rise in VAT, above-inflation rises in train fares, and a series of wider pressures on families’ food and fuel bills.”
While many studies merely look at income as a definition of what constitutes the ‘squeezed middle’, Mosaic instead uses a huge range of factors including car ownership, number of holidays and attitudes and behaviours in its analysis of what fits into the demographic. Its findings suggest that Slough is the area most representative of the group in ‘Middle Britain’, with almost two-thirds of its residents being in the middle defined by Experian.
Although it uses Mosaic, the study itself is deeply flawed in its methodology. The chart below displays the median average income in Britain, which is far below the £47,300 outlined in ” The Real Middle Britain”:
In contrast the Resolution Foundation’s November 2010 report had the average household income closer to £32,000. This is because the mean average income, even in the 22 per cent that Experian used as their dataset, can be completely distorted by small numbers of extremely well off households, which does not happen when one uses median average income.
A spokesman for Experian today confirmed to Left Foot Forward that the data used was only sourced from the 22 per cent they studied, but this only proves to show that ‘The Real Middle Britain’ has income far beyond the actual middle earners in the country. Although it purports to merely be looking beyond income, financially it does not represent the ‘squeezed middle’ as accurately as other studies.
Since that is the case it raises the question of what is the real purpose of the study, and does it unintentionally distort what constitute the ‘middle’?
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