Measuring local, salient economic inequality in the UK

Abstract

Nascent research across academic disciplines finds that local economic inequality is an important driver of attitudes and behaviour. However, given a lack of granular data on income and wealth in the UK, measuring local economic inequality has been impossible. I address this measurement gap by exploiting data on housing values for over 26.6 million addresses -- nearly the universe of residential properties in the UK -- producing a fine-grained measure of local inequality for the first time. Across two surveys, I demonstrate that housing inequality is substantively associated with perceptions of income inequality, suggesting that housing value inequality is salient to individuals. Finally, I examine patterns of inequality from the city down to the neighbourhood-level, revealing some striking facts: first, there is far larger variation in inequality at the neighbourhood-level than at the level of cities and above, pointing to varied experiences and encounters with inequality that is obscured by taking a macro focus. Second, inequality has declined at the local level on average from 1999 to 2019.