Economic statistic of the week: do you know how well off you are compared to others?

The higher your personal income, the more likely you are to under-estimate how well off you are compared to other people in Britain.

That was one of the findings in a piece of MORI research from 2008 which looked at people’s actual level of personal income and how they thought that level of income compared to everyone else.

Of people who were in the richest 10%, nearly four out of five (79%) thought they were less well off than that and were not actually amongst the richest 10%. Only a fifth (21%) got their place in the richest 10% correct.

However, of people in the next band down – in the top 25% but not in the top  10% – it was two-thirds (65%) who under-estimated where they fell compared to other people, and that figure fell again to just under four in ten (38%) for those in the top 50% but not in the top 25%.

In other words, the higher up the income spectrum people were, the more likely they were to wrongly think they were not as rich compared to others as they actually were.

Overall the figures were:

Top 10%: 79% under-estimated, 21% correct
Next 15%: 65% under-estimated, 31% correct, 4% over-estimated
Next 25%: 38% under-estimated, 41% correct, 21% over-estimated

Note: due to the small sample size for the richest 1%, I have combined the richest 1% with the next richest band in MORI’s raw data. People were asked whether they fell into the bottom 50%, between 50% and 75%, between 75% and 90%, between 90% and 99% or in the top 1%.

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