A comparison of current and annual measures of income in the British Household Panel Survey

The measures of household income in UK household surveys refer to income received round about the time of the interview (“current income”). By contrast the measure of income in surveys for most other countries refers to annual income. The British Household Panel Survey provides a unique opportunity to compare estimates of Britain’s income distribution based upon both current and annual measures. This article compares the measures, shows that they provide remarkably similar estimates, and explains why. The results suggest that differences in income distributions between Britain and other nations do not arise because of the different survey measures of income.