Disclaimer

This paper reports the results of research and analysis undertaken by Census Bureau staff. It has undergone a Census Bureau review more limited in scope than that given to official Census Bureau publications. This report is released to inform interested parties of ongoing research and to encourage discussions of work in progress.

Data on the shares of aggregate income received by the various income quintiles are frequently calculated using households as the reference unit. That is, households are ranked by their level of income in order to determine which households are in the bottom quintile of the income distribution, and which are in the second, third, fourth, and top quintiles. It is then possible to determine the share of aggregate income that is received by each group of households.

A criticism of this method of measuring income shares is that the average size and composition of households may change over time. For example, if there is a very large increase in the proportion of households with only one member, it may be that an observed change in the share of income received by households in the bottom quintile may be a reflection of this change rather than a real change in the distribution of economic well-being.