Chapter

Income over Time: Measurement Issues

Stephen P. Jenkins

in Changing Fortunes

Published in print July 2011 | ISBN: 9780199226436
Published online September 2011 | e-ISBN: 9780191728457 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199226436.003.0002
Income over Time: Measurement Issues

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This chapter discusses how economic well-being should be measured when the perspective is a longitudinal one. Topics addressed include the relative merits of income and consumption expenditure, the sources that make up income, and the income unit (distinguishing between a household and an individual). It is pointed out that only individuals can be followed consistently over time (households cannot, because they form and split over time). Particular attention is given to the measurement of income over time, considering the related issues of the accounting period for income and various longitudinal concepts such as transitions, transition probabilities, and spells. A case is made for use of a current income definition (rather than an annual income definition). Also discussed are the nature and implications of measurement error in income data.

Keywords: economic well-being; income; current income; measurement error

Chapter.  14004 words.  Illustrated.

Subjects: Financial Markets

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