Households with income at the extremes of the national income distribution (the top 20% or bottom 20%) (index)

<sdt id="-333920538" sdttag="goog_rdk_1">Income inequality matters to community health. </sdt>Economic inequality <sdt id="-755908260" sdttag="goog_rdk_2">in the U.S. has been growing </sdt>since the 1970s<sdt id="578483689" sdttag="goog_rdk_4">,</sdt>1 <sdt id="744066846" sdttag="goog_rdk_6">taking on </sdt>a geographic dimension in the form of growing economic segregation<sdt id="689268658" sdttag="goog_rdk_9">. </sdt><sdt id="-1405596065" sdttag="goog_rdk_14">P</sdt>eople who are economically privileged tend to reside in communities that are almost exclusively wealthy, while those <sdt id="-647054199" sdttag="goog_rdk_15">with few economic resources</sdt> tend to reside in communities that are almost exclusively poor.2 Research suggests that<sdt id="149646830" sdttag="goog_rdk_17">, </sdt>due to<sdt id="-727839921" sdttag="goog_rdk_19"> social and physical environmental factors</sdt><sdt id="-2045967623" sdttag="goog_rdk_26">, </sdt><sdt id="-120844154" sdttag="goog_rdk_28">living in a </sdt>wealthier communi<sdt id="632674818" sdttag="goog_rdk_29">ty</sdt> benefit<sdt id="479354307" sdttag="goog_rdk_31">s health</sdt>, whereas <sdt id="1518580454" sdttag="goog_rdk_33">living in a </sdt>poorer communit<sdt id="-1881309711" sdttag="goog_rdk_34">y</sdt> pose<sdt id="189115073" sdttag="goog_rdk_36">s</sdt> risks to health.3

<sdt id="-1263987734" sdttag="goog_rdk_49">The measure of income inequality that we use is called the Index of Concentration at the Extremes (ICE).  For a given city or census tract, it compares the number of households in the bottom 20<sdt id="411052377" sdttag="goog_rdk_40">th</sdt> percent<sdt id="-1664309230" sdttag="goog_rdk_41">ile</sdt> of national household income to the number of households that fall in the top 20<sdt id="301209285" sdttag="goog_rdk_42">th</sdt> percent<sdt id="-973833406" sdttag="goog_rdk_43">ile</sdt><sdt id="843053579" sdttag="goog_rdk_45"></sdt>of national household income. This number then describes the mix of household incomes in the area, ranging from -100 (all of the households are in the <sdt id="-619534525" sdttag="goog_rdk_46">underprivileged </sdt>category) to +100 (all of the households are in the privileged category), with 0 signifying that <sdt id="88734525" sdttag="goog_rdk_48">both economic groups are present in equal numbers, or that all households fall into either extreme group</sdt></sdt>.4

Check out <a href="https://www.cityhealthdashboard.com/story/885">our blog</a> for more information!

<table border="1" cellpadding="1" cellspacing="1"><tbody><tr><td>Strengths of Metric</td>
			<td>Limitations of Metric</td>
		</tr><tr><td>
			<ul><li>The ICE measure describes both the size and direction (whether shifted toward the less or more privileged) of income inequality in an area.3</li>
				<li>In small geographic areas (like census tracts), the Index of Concentration at the Extremes is a more robust measure than related measures such as the Gini Index.4  
				<div> </div>
				</li>
			</ul></td>
			<td>
			<ul><li>The ICE measure is not in as widespread use as other measures of inequality, like the Gini Index or the 20:20 Ratio.5</li>
				<li>The metric reflects the relative income distribution in a region. It is not an absolute measure of disparity.</li>
				<li>The ICE metric does not provide information on the causes of inequality.</li>
			</ul></td>
		</tr></tbody></table>

The count of households at or below the 20th percentile in income distribution in a geographic area is subtracted from the count of households at or above the 80th percentile in income distribution in the same geographic area.4 The resulting value is divided by the total number of households for in the area for which income is reported. This value is then multiplied by 100 to provide a score that ranges from –100 to +100, with –100 indicating that all households are in the lowest category of income and +100.0 indicating that all households are in the wealthiest income category. A value of 0 suggests that both economic groups are present in equal numbers, or that all households fall into either extreme group.

For more information on the calculation, please refer to the <a href="/technical-documentation" target="_blank">City Health Dashboard Technical Document</a>.

Estimates for this metric are drawn from <a href="mailto:https://www.census.gov/programs-surveys/acs/">American Community Survey</a> five-year estimate data using the B19001 table. Multi-year data are available for this metric. For more information, please refer to <a href="/multi-year-data">Using Multi-Year Data: Tips and Cautions</a>.

<ol><li>Saez E, Zucman G. Wealth inequality in the United States since 1913: Evidence from capitalized income tax data. The Quarterly Journal of Economics. 2016;131(2):519-78.</li>
	<li>Massey DS. The age of extremes: Concentrated affluence and poverty in the twenty-first century. Demography. 1996;33(4):395-412.</li>
	<li>Kramer MR. Residential Segregation and Health. In Duncan, D (ed.). Neighborhoods and Health. 2018, p321-356.</li>
	<li>Krieger N, Waterman PD, Spasojevic J, Li W, Maduro G, Van Wye G. Public Health Monitoring of Privilege and Deprivation With the Index of Concentration at the Extremes. American Journal of Public Health. 2016;106(2):256-263.</li>
	<li>De Maio FG. Income inequality measures. J Epidemiol Community Health. 2007;61(10):849-852.</li>
</ol>Last updated: July 26, 2023

Income Inequality

Households with income at the extremes of the national income distribution (the top 20% or bottom 20%) (index)

Why do we measure income inequality?

How do we measure income inequality?

Strengths and Limitations

Calculation

Data Source

References