Household Income and Expenditure Survey Analysis Report

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2005 Household Income and Expenditure Survey Report3.1.2. Total Annual Household Income by Decile and Quintile GroupsA useful method of analyzing income is by deciles and quintiles. To derive the deciles, households aresorted by income from the least to the highest. They are then divided into ten equal groups referred to asdeciles. The lowest group in the ranking is the first decile, the second group is referred to as the seconddecile and so forth. The tenth decile is referred to as the top ten percent of households. The first and tenthdeciles could be used as proxy for the “poor” and the “rich”, respectively. The quintiles are derived thesame way as the deciles. However, the data is divided into five groups and each of the quintiles represents20% of households. Each state’s data is sorted separately thus the range of each quintile is different foreach state.The share of the total income increases as the decile increases (Table 3). The first decile or lower tenpercent of households has about 2% of the total household income. On the other hand, the tenth decile(households with the highest income) had a share of 32%.Table 3. Total Annual Household Income by National Decile: 2005IncomeIncome Decile ($000) PercentFSM 220,465 100.0First Decile 3,939 1.8Second Decile 7,851 3.6Third Decile 10,521 4.8Fourth Decile 16,812 7.6Fifth Decile 10,686 4.8Sixth Decile 17,182 7.8Seventh Decile 21,258 9.6Eighth Decile 26,537 12.0Ninth Decile 35,896 16.3Tenth Decile 69,783 31.7Source: 2005 Household Income and Expenditure SurveySimilar to the national decile trend, total income increases with the quintile grouping. In other words, thericher the household the higher its percentage share of the total income (Figure 2). The income share of thefirst quintile is highest in Chuuk at 6.7% and lowest in Pohnpei at 3.5%.Figure 2. Percentage Distribution of Total Income by Quintile Group and State: 2005Percent of total income6050403020100Yap Chuuk Pohnpei KosraeFirst Second Third Fourth Fifth3.1.3. Total Annual Household Income by Income ClassTable 4 shows that nationally, about 23% (equivalent of $49 million) of the national total income wascontributed by households with income level of less than $10 thousand (Table 4). More than half or 54% ofthe households in the FSM have income of less than $10 thousand.Two thirds or 66% of all households in Chuuk had total income of less than $10 thousand. Thecorresponding figure was 35% in Yap and 47% in Pohnpei and Kosrae. Few households were in the highestDivision of Statistics,6 Office of Statistics, Budget & Economic Management, Overseas Development Assistance, and Compact Management
2005 Household Income and Expenditure Survey Reportincome classes. About 4% of households in Pohnpei reported an annual income of $50 thousands and over.The corresponding figure was about 1% in Kosrae.Table 4. Total Annual Household Income by Income Class and State: 2005PERCENT (US$ 000)HOUSEHOLDSIncome Class Total Yap Chuuk Pohnpei Kosrae Total Yap Chuuk Pohnpei KosraeTotal 220,465 34,468 76,619 94,010 15,369 16,427 2,207 6,994 6,029 1,197Percent 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Less than 2,500 0.8 0.2 1.0 0.8 1.1 6.4 1.9 5.8 8.3 8.62,500-3,999 1.9 0.8 2.9 1.5 1.6 7.7 3.8 9.4 7.3 6.44,000-5,999 5.6 2.1 10.3 3.1 5.4 14.9 6.3 21.9 10.1 13.66,000-9,999 14.4 12.0 20.6 10.6 11.2 24.6 22.8 29.4 21.0 18.610,000-14,999 16.8 21.4 17.1 13.9 21.7 18.4 26.8 15.6 17.6 22.915,000-19,999 13.6 15.4 10.2 15.1 16.9 10.6 13.8 6.5 13.7 12.120,000-29,999 17.3 23.0 12.2 18.4 22.5 9.5 14.9 5.5 11.7 11.430,000-49,999 14.7 19.4 11.0 15.7 16.6 5.4 8.2 3.4 6.6 5.750,000 + 15.1 5.6 14.6 20.9 3.1 2.6 1.5 2.4 3.6 0.7Source: 2005 Household Income and Expenditure Survey3.1.4. Total Annual Household Income by Householder CharacteristicsA higher percentage of male-headed households were in the higher income ranges ($10+ thousand classes)than female-headed households, who were more likely to be in the lower income classes.Figure 3. Total Income by Sex of Householder and Income Class: 2005Percent of households302520151050MaleFemale< 2.5 2.5-3.9 4.0-5.9 6.0-9.9 10.0-14.9 15.0-19.9 20.0-29.9 30.0-49.9 50.0+Income class (US$ 000)Furthermore, households with Non-FSM ethnic householders are more likely to have higher incomes ($15to $49 thousand income classes) compared to households with FSM ethnic householders. The contributionof Non-FSM ethnic householder amounted to $14 million, very close to the $16 million contribution ofKosraean households (see also Appendix B, Table 12).Figure 4. Distribution of Total Household Income by Income Class and Ethnicity of Householder: 2005Percent of households30252015105FSM ethnicnon-FSM ethnic0< 2.5 2.5-3.9 4.0-5.9 6.0-9.9 10.0-14.9 15.0-19.9 20.0-29.9 30.0-49.9 50.0+Income class (US$ 000)Division of Statistics,Office of Statistics, Budget & Economic Management, Overseas Development Assistance and Compact Management 7
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