21. The basic unit of census data is the household, not the person. If divorce breaks one household into two, but no individual person’s income changes, how (if at all) is mean household income affected?
21.
The mean household income will decrease. Even though separately the two divorced parties have the same combined income, the total number of households has increased. By thinking about the formula for , the numerator will remain the same, but the denominator will increase by the number of divorces that establish new households.