Broken Arrow Rank on Income Equality Depends on Calculation

Mar 14, 2014

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A study ranks Broken Arrow highly for income equality, but it uses a different measure than a similar analysis.

Financial data company NerdWallet came up with an income ratio of 8.8 for Broken Arrow, "which essentially means that, that gap between the lowest-earning 20 percent and the highest-earning 20 percent in Broken Arrow is a lot smaller than in most other places in the country," explained company analyst Sreekar Jasthi.

Broken Arrow ranks 12th for income equality among U.S. cities with populations larger than 100,000 according to NerdWallet, but the study uses a different calculation than one which ranks the city much worse. NerdWallet’s study calculated its income ratio by dividing the top 20 percent of households’ average income by the bottom 20 percent's average income.

A study from the Brookings Institution uses the top 5 percent of households' average income divided by the bottom 20 percent's. Using that calculation, Broken Arrow's ratio is 13.9, worse than half of Brookings' top 10 large cities for income inequality.

Jasthi said both studies use valid measures.

"Ours is a little more all-encompassing while theirs just measures the same variables, so to speak, but at a more extreme level, because they're limiting themselves to that very, very elite 95th percentile," Jasthi said.

And with a ratio of 36.1, calculated using Brookings' formula, Tulsa is nearly three times worse than Broken Arrow for income inequality.

Both studies used mean household income of quintiles data from the U.S. Census Bureau.