Woods & Poole Wealth Index
February 21, 2022
The Woods & Poole Wealth Index is a measure of relative total personal income per capita weighted by the source of income. The Wealth Index is the weighted average of regional income per capita divided by U.S. income per capita (80% of the index); plus the regional proportion of income from dividends/interest/rent divided by the U.S. proportion (10% of the index); plus the U.S. proportion of income from transfers divided by the regional proportion (10% of the index). Thus, relative income per capita is weighted positively for a relatively high proportion of income from dividends, interest, and rent, and negatively for a relatively high proportion of income from transfer payments. Because the imputed rent of owner-occupied homes is added to rental income of persons in calculating total personal income, some of the appreciated value of owner-occupied homes is included in rental income. Since dividends, interest, and rent income are a good indicator of assets, the Woods & Poole Wealth Index attempts to measure relative wealth.