Total Personal Income in the Woods & Poole Database
February 4, 2019
Historical data for total personal income are from the U.S. Department of Commerce, Bureau of Economic Analysis. Current BEA data, based on the 2016 BEA revision, have a discontinuity in total personal income and its components for the years 1969-2000 compared to 2001 forward; personal income data in the Woods & Poole database retain this discontinuity. Total personal income is the income received by persons from all sources, that is, from participation in production, from both government and business transfer payments, and from government interest, which is treated like a transfer payment. Persons consist of individuals, nonprofit institutions serving individuals, private uninsured welfare funds, partnerships and private trust funds.
Personal income is the sum of wages and salaries, supplements to wages and salaries , proprietors’ income, rental income of persons, dividend income, personal interest income, and personal current transfer receipts less contributions for government social insurance.
As with employment and earnings of employees, the definition of total personal income used by Woods & Poole is the most comprehensive one available. Another commonly used measure of income is money income of persons. Money income is the concept used by the Bureau of the Census and is widely used in other sources. When Woods & Poole’s income data are higher than data from another source, once inflation adjustments are taken into account, it is often because the other source uses money income base data. Total personal income includes all of money income plus the exclusions to money income. Money income excludes payments-in-kind such as food stamps, agricultural payments-in-kind, and the value of in-kind medical payments; the imputed rental value of owner-occupied housing; the imputed value of certain interest payments such as the value to consumers of free non-interest bearing checking accounts; all other labor income; capital consumption adjustments for proprietors; inventory valuation adjustments, although sometimes this is negative; and lump-sum payments such as liability judgments and consumer defaults on debts to businesses. For the U.S. as a whole, money income is about 25% less than total personal income; at the regional level, the difference varies depending on the specific composition of total personal income.
Another commonly used measure of income is disposable income, which is defined as total personal income less personal tax and non-tax payments. Disposable income is the income available to persons for spending or saving.