As more people join higher-income groups transiting from the lower-income groups, the average income in the economy grows.
When a higher-income group grows faster than a lower-income group, the income gap between the two diverges and the across-group inequality increases (or vice versa).
We have also shown that those in the lower-income group were more debt averse than those in the middle and upper classes.
Keeping costs down and reducing disincentives by making means-testing less generous would make many lower-income pensioners worse off than under current plans.
In the third step, the neighbourhood characteristics were entered : degree of urbanisation, percentage of age peers, percentage of lower-income households, and residential mobility.
Thus, lower-income respondents tend to use a greater number of strategies rather than a number of more drastic ones.
Overall then, debt aversion was a factor for those from the lower-income group, but not for those from the middle class.
Recall that debt aversion was only an issue for those from lower-income families.