Why does an area's Median Household Income seem too high?

Median household income, as reported in a table shown on the Economy tab of the Neighborhood Details page (see example below), can appear skewed in areas where there is a concentration of very high data.

 

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To minimize potential distortion of this statistic, RPR uses a multi-step process to calculate median household income for an area.

The U.S. Census reports household Income data by ZIP code by summing up household counts by income bracket, with brackets typically representing ranges of $15,000, for example: $15,000-$30,000, $30,000-$45,000, etc. The lowest bracket is less than $15,000 and the highest is greater than $150,000.

A data provider, PolicyMap, applies a formula to this Census data to derive an actual median household Income value by ZIP. Because of the lack of an upper value with the highest bracket, the PolicyMap formula implies one. And to most adequately represent data from this bracket, that implied upper value set by PolicyMap statisticians is very high.

Due to this process, the PolicyMap formula can produce an abnormally high median household income value In ZIP codes with high concentrations of households with incomes in the top bracket. Therefore, a ceiling has been set for median household income value. That value is $1,000,001, which means that no area will display a median household income higher than this. But there may still be values that skew high due to the calculation process used to generate the median household income. If you see $1,000,001 displayed as an area's median household income, you will know that the income was skewing higher for that location.

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