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Introduction

This research monitor uses 2004 household income figures obtained from the Eurostat website. All the income figures (including the previous results) for European NUTS level-2 regions can be downloaded from the Eurostat website and have also been placed in the Data Download Centre.

For statistical purposes, the 27-member European Union is geographically divided into 5 different levels of statistical units – the so-called "Nomenclature of Units for Territorial Statistics" (NUTS). NUTS level-1 areas are regions such as the North West of England, whilst the lowest level, number 5, relates to local authority ward boundaries. The broader Lancashire area, which includes the unitary authorities of Blackburn with Darwen and Blackpool, along with the 12 district councils, is classified as a NUTS level-2 region.

In total, the present 27-member EU contains 268 NUTS level-2 areas, and the 2004 results are available for 248 of the 268 NUTS-2 level EU areas in the 27-member European Union. Figures are not available for Bulgaria, seven areas of Portugal, French overseas territories, Cyprus, Luxembourg, Malta and Slovenia.

Regional Gross Domestic Product (GDP), PPS, PPCS and Primary Income

Gross Domestic Product is a measure of the sum of economic activity within an area and is derived by adding the total value of an area's annual output of goods and services.

Regional Gross Domestic Product (GDP) is the indicator most often used to measure the wealth of regions and is calculated by identifying the total value of goods and services produced in a region by persons employed in that region. However, as a result of inter-regional commuter flows and state intervention, GDP figures do not generally tally with the income accruing to the inhabitants of the region. A more accurate picture of a region's economic well-being can be obtained by measuring private household income, known as primary income.

For inter-regional comparisons income can be expressed as a value known as purchasing power consumption standard. Table 1 lists selected NUTS-2 level figures for primary income of private households per inhabitant and figures based on final consumption per inhabitant.

The primary income figures include salaries, interest, dividends and rents etc. The final consumption figures show the results of state interventions. All social benefits and transfers other than in kind are added and from this total households pay taxes. As a result of taxes withheld by the State, disposable income is generally lower than primary income.

The Regional Gross Domestic Product (GDP) in Europe research monitor provides additional complementary information on Lancashire economic position within Europe.

The Lancashire Perspective

Table 1 shows the NUTS-2 regions with the highest and lowest primary income per inhabitant, along with the Lancashire figures and other NUTS-2 regions with similar primary income figures to Lancashire. Inner London comfortably recorded the highest figure whilst to the west of the capital the Berkshire, Bucks and Oxfordshire area was in third position. The wealthy German city of Hamburg occupied second position, with another area of Germany (Oberbayern) in fourth place. The central Paris area (Ile-de-France) was the fifth wealthiest NUTS-2 region in Europe by this particular measure.

Lancashire recorded a figure of 15,570 which was just over half of the inner-London value. Table 1 emphasises how state interventions affect final consumption figures and how the gap between Lancashire and the top performing areas does narrow. It also emphasises how the most deprived parts of the EU benefit from social payments and transfers.

The new EU country Romania has eight NUTS-2 areas and seven of these eight areas occupy the bottom seven positions.

For further details, or if you have any ideas for improving the content of this article, please contact:
Bryan Moulding
Tel 01772 534172
Email Bryan.Moulding@lancashire.gov.uk