Median household income is an economic indicator commonly used as a proxy for quality of life. This metric is also often used to determine if residents in a given location are able to afford the cost of living of residing in that area. In conjunction with per capita income, median household income is used to determine the wealth of a given region. This metric includes both part-time and full-time workers.
Louisville currently ranks 10th among its peer cities in median household income with a median income of $55,000.
Louisville is in the middle of its peer group according to a natural breaks algorithm. Cities in green are those that outperform their peers, cities in yellow represent the middle cluster, and those in red are a group that lags behind its peers on this indicator.
There is tremendous variation in income across the city. In the map to the left, areas with higher median household income are displayed in green, and areas with lower median household income are displayed in red.
A dramatic divide in median household earnings exists in Louisville. Households in eastern Louisville receive higher median earnings than those in West Louisville. As showcased on the map to the left, households in Floyd’s Fork garner a median earning of over $80,000. Households downtown and in Old Louisville garner a media wage of only $17,800. Residents in the Phoenix Hill and Smoketown receive a median earning of $18,200. Russell neighborhood households receive a median income of $20,400.
Scroll over the map to see values for each census tract. Zoom in to see street names that form the boundaries of each tract.
After a period of decline from 2000 to 2009, Louisville’s median household income began to rise. Since 2011, median household income in Louisville has seen a steady rate of improvement relative to its peers and moved from close to the 25th percentile to near the peer mean.
The median income in Knoxville, the most improved city, increased from $3,500 below the peer mean in 2000 to $1,400 above the peer mean in 2016. Louisville’s median household income decreased by $300, compared to an average decrease of $1,600 among peer cities. Median household income in Indianapolis, the worst-performing peer city, decreased by almost $9,000.
For each indicator, Greater Louisville Project assigns cities into one of three groups (high-performing, middle-of-the-pack, and low-performing) based on how they compare to other cities. The assignment is based on how cities naturally cluster on that indicator. Sometimes, the differences between cities are very small, and the difference between a city ranked 5th and 6th could simply be a matter of the sampling error that arises from using survey data. Thus, rather than always make a division that declares the top 5 to be the top tier, we use a natural breaks algorithm to look for a cluster of cities that is outperforming the rest, a cluster that is about average, and a cluster that is lagging. This clustering gives us a better indication of where Louisville is thriving and where Louisville has room to learn from cities that are doing better.
Z-scores (or standardization) is a way to combine data with different units of measurement into a single index. The z-score is a measure of how far away a city (or census tract, etc.) is from the average city. In order to be comparable across different units of measurement, the z-score is the distance from the mean measured in standard deviations (e.g. if Louisville has a z-score of 1 it means Louisville is 1 standard deviation above the mean of its peer cities).
Data from the Robert Wood Johnson Foundation's County Health Rankings use z-scores and all z-scores are relative to the mean of Louisville's peer cities. (On the County Health Rankings site z-scores are relative to all the counties in each state - thus z-scores reported by GLP will be different, because we are using a different reference group). The Greater Louisville Project also uses z-scores in our multidimensional poverty index, which compares each census tract to the mean of all census tracts in Louisville.
