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November / December 2009
Volume 21, Number 6

Data about counties, by Tim Brown

A Look at the Changing Median Household Income in Texas

Every year, the U. S. Census Bureau releases estimates of the median household income¹ for states, counties and school districts. In October, the bureau released its 2008 estimates, including an estimated median of $50,049 for the state of Texas.

That amount was about 4 percent lower than the United States 2008 estimate of $52,029. While lower than the U.S. estimate, the median for Texas has been increasing faster than the national median.

In 2005, the estimate for Texas was almost 9 percent below the estimate for the nation. However, from 2005 to 2008, the median household income in Texas increased 16.7 percent, compared to only 12.5 percent nationally. Those estimates have not been adjusted for inflation. The Consumer Price Index rose just over 10.2 percent during the same period, accounting for the vast majority of the growth in both the national and state estimates.²

Due to our state’s history as an oil and gas producer, one might wonder if the tremendous run-up in oil prices during 2008 accounted for most of the increase. Although 2008 data is not yet available, total personal income³ from oil and gas extraction in Texas increased 34.3 percent from $31 billion in 2005 to $41.5 billion in 2007 according the U. S. Bureau of Economic Analysis. It is likely, given that the price of oil did not hit $100 per barrel until April of 2008, that the total personal income from this industry continued to increase in 2008. By comparison, total personal income in Texas (all industries) increased only 16.6 percent from 2005 to 2007.

The first chart shows that, for the most part, the counties where the median household income had the greatest percentage increase from 2005 to 2008 were spread across the state. The two major exceptions are found in west Texas and in the northern panhandle.

The second chart shows the percentage change over a shorter period of time. This is the change in median household income from 2007 to 2008. The most obvious difference is that this chart shows households losing ground in a number of counties. While income for oil and gas production was clearly increasing, that growth was insufficient to offset other factors. Factors which may have contributed to the decline in median household income in these counties include growing unemployment, declining home sales (causing decreases in construction and realtor incomes, for example), inflation and other factors beyond the scope of this article.

¹ Median income = as many households had income less than this amount as had more income than this amount.

² United States Bureau of Labor Statistics. CPI Inflation Calculator. http://www.bls.gov/data/ inflation_calculator.htm


³ The total income received by all persons from all sources.