Disposable Income per Capita

An indicator of the ability or inability of households, by income deciles, to purchase goods and services other than food

In Israel there is a 25-fold discrepancy in the per capita disposable income between the lowest decile and the highest decile – a discrepancy that concentrates the purchasing power and impacts of consumption within a small sector of the population. Given that a high disposable income enables consumption and imposes pressures on the environment, corrective government policy should include measures designed to  modify the consumption patterns of the upper and lower deciles alike.

Per capita disposable income is the portion of income that remains after deducting the expenditure on food and dividing by the number of individuals in the household. In 2008 the average monthly per capita disposable income in the lowest decile was less than 400 NIS (roughly 50% of total income) compared to 10,000 NIS per capita for the highest decile (roughly 90% of total income). The  gap between per capita disposable incomes of the highest and lowest deciles is widening over time. The deficit among those in the lower deciles creates a snowball effect, preventing pursuit of an education or a reasonable lifestyle, entrenching and increasing the gaps and transmitting them to the next generation. The gaps are expected to increase through 2030, with a slight improvement of the lowest decile’s disposable income after food expenditure reaching 550 NIS, while this figure is expected to reach 18,000 NIS for the highest decile.

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