Income distribution in Vága region

Income distribution describes how wages are distributed according to sex, age, household type and area of residence. In addition to indicating income equality and inequality, income distribution figures show that people have varying levels of income depending on their stage of life. Students typically have a low level of income, which tends to increase after graduation and with each subsequent year of employment. Income distribution figures are also affected by persons opting out of an income or work part-time.


  • The Gini coefficient is used as a measure of income inequality. If all citizens in a country have the same income, the country’s income Gini coefficient would be 0. If one household earns all of the country’s income, the income Gini coefficient would be 100.
  • The Hoover index, also known as the Robin Hood index, is an inequality metric representing the portion of total incomes that would have to be redistributed to achieve income uniformity.
  • The income quintile share ratio, also known as ‘the S80/S20 ratio’ divides the population into five equally large groups (quintiles) and compares the total income of the 20% of the population with the highest income (top quintile) to that of the 20% with the lowest income (bottom quintile).
  • Income is money received through work or through proceeds from one’s own business, state benefits such as pension, unemployment benefits, interest subsidies and student grants, plus capital gains such as interest and dividends.
  • Gross income is the total income before subtraction of taxes and other statutory deductions.
  • Net income is income remaining after taxes and other statutory charges have been deducted.
  • Median income is the income amount dividing the population into two equal groups, with half of the population having an income higher than this amount and the other half lower.
  • Average income is calculated as a normal average.
  • Equivalent income figures are based on an equivalised disposable income consisting of a household’s total income, divided by the number of household members converted into equalised persons weighed according to their age. With this calculation method, incomes of different types are made comparable by taking account of shared consumption benefits. A large household needs a higher total income than a small one; however, a large household has shared consumption benefits. For example, a five-person household does not need to pay five times for all everything (e.g. energy, domestic appliances, etc.)
  • A household is defined as the number of people who are registered as persons having the same residence the last day in the year. Residents of institutions or boarding houses are not included in household statistics. This means that household figures do not represent the total population. An additional requirement for inclusion in a household statistic is that at least one person in the household has been fully taxable the entire year. Adults are 18 years or older.
  • The income in a given percentile group is the average income of the person in the percentile group.

See also Income distribution.


Income figures have a lag of approx. one year, since income statistics are based on tax authority TAKS’s tax list, which is not completed until just over a year after the registration year when all income assessments have been concluded.

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