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HomeSource and Methodology: Personal Income Rates

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| SOURCE & METHODOLOGYPersonal Income Rates
**Total Personal Income:** Personal income is the income that is received by persons from participation in production, from both government and business transfer payments, and from government interest (which is treated like a transfer payment). It is calculated as the sum of wage and salary disbursements, other labor income, proprietors' income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and transfer payments to persons, less personal contributions for social insurance. 

The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients. 

**Transfer Payments:** This component of personal income is payments to persons for whom no current services are performed. It consists of payments to individuals and to nonprofit institutions by federal, state, and local governments and by businesses. Transfer payments include retirement and disability insurance benefit payments, medical payments, income maintenance benefit payments, unemployment insurance benefit payments, veterans benefit payments, and other such payments. 

**BEA Population:** The mid-year (July 1) population estimated by the Census Bureau and used in the calculation of per capita measures. 

**Per Capita Income:** This measure of income is calculated as the personal income of the residents of a given area divided by the resident population of the area. In computing per capita personal income for states and counties, BEA uses the Census Bureau's annual midyear population estimates. Except for the college student and other seasonal populations, which are measured on April 1, the population for all years is estimated on July 1. 

**Per Capita Income, Percent of U.S. Average:** This value is computed by dividing the per capita income of a county, state, or region by the national average. 

**Per Capita Market Income:** Total personal income, less transfer payments, divided by the mid-year population. 

**Per Capita Market Income, Percent of U.S. Average:** This value is computed by dividing the per capita market income of a county, state, or region by the national average. 

*Source:*U.S. Department of Commerce, Bureau of Economic Analysis, Local Area Personal Income. 

Compiled by the Appalachian Regional Commission. |
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