An example of this type of adjustment is a regular occurrence in Sheridan County, Wyoming. Here, a significant number of employees work at coal mines in Montana, but reside in Sheridan County, Wyoming. Earnings for these employees show up as earnings data for Montana. However, in the derivation of personal income by place of residence, an adjustment is made to reallocate these earnings as personal income for Wyoming. A third adjustment is made by appending dividends, interest, and rent income.
Interest is the monetary and imputed interest income of persons from all sources.
The fourth and final adjustment is the addition of transfer payments. Transfer payments are income payments to persons, generally in monetary form, for which they do not render current services. As a component of personal income, they are payments by governments and businesses to individuals and nonprofit institutions. Once these four adjustments to the earnings by place of work component are made, the result is total personal income by place of residence. Personal income effectively measures the size of consumer markets.