by Wealth Decile

Overview

The winners and losers by wealth decile metrics provide insights into how a policy reform impacts different segments of the population based on their wealth. These metrics help understand the distributional effects of policy changes across various wealth deciles.

Available Metrics

  1. winners_and_losers/by_wealth_decile: Calculates the proportion of people in each wealth decile who experience a gain or loss of income due to the reform, categorized into different ranges of percentage change.

Metric Structure

The winners_and_losers/by_wealth_decile metric returns a dictionary with the following keys:

  • deciles: A dictionary where each key represents a wealth decile, and the value is a list showing the proportion of people in that decile who fall into different categories based on their income change:

    • Lose more than 5%

    • Lose less than 5%

    • No change

    • Gain less than 5%

    • Gain more than 5%

  • all: A dictionary showing the overall proportion of people across all wealth deciles who fall into each income change category.

All proportions are expressed as percentages and rounded to 1 decimal place.

Example Usage

from policyengine import EconomicImpact

# Initialize the EconomicImpact class with a reform
impact = EconomicImpact(reform={
  "gov.hmrc.income_tax.rates.uk[0].rate": {
    "2024-01-01.2100-12-31": 0.55
  }
}, country="uk")

# Calculate winners and losers by wealth decile
by_wealth_decile = impact.calculate("winners_and_losers/by_wealth_decile")

# Print the results
print(f"By wealth decile: {by_wealth_decile}")

Output

{
    "result": {
        "deciles": {
            "Lose more than 5%": [21.0, 31.4, 58.9, 64.5, 68.7, 79.3, 81.1, 82.6, 84.5, 86.4],
            "Lose less than 5%": [6.6, 9.9, 2.3, 1.9, 3.4, 2.0, 0.4, 2.6, 0.2, 0.6],
            "No change": [72.3, 58.6, 38.8, 33.6, 27.9, 18.7, 18.4, 14.8, 15.3, 13.0],
            "Gain less than 5%": [0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0],
            "Gain more than 5%": [0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0]
        },
        "all": {
            "Lose more than 5%": 65.8,
            "Lose less than 5%": 3.0,
            "No change": 31.1,
            "Gain less than 5%": 0.0,
            "Gain more than 5%": 0.0
        }
    }
}

Interpretation

In this example:

  • The proportion of people in the lowest wealth decile who lose more than 5% of their income is 21.0%, while those who gain more than 5% is 0.0%.

  • The proportion of people in the highest wealth decile who lose more than 5% is 86.4%, with no gain more than 5%.

  • Overall, 65.8% of the population experiences a loss of more than 5% in income, with no significant gains.