Household main activity out of wage, self-employed farm and self-employed nonfarm and similarly by industry such as agriculture, manufacturing and service are determined by the source of major income generation by the household.

# **Income data**

Income was collected separately for each Income Receiver and separately by source of income. Wage income, Agricultural self-employment income, Non Agricultural self-employment income and other transfers were recorded in separate schedules with the identification of household. In HIES 2009/10 and 2012/13, additional cash receipts from loan taken, sale of assets, and withdrawal from savings, repayment received from loan given, and receipts with regards to death/birth/marriage, compensation and gain from lottery were collected under income section. Incomes from these sources are not considered as income as these are not income by concept and these were not collected in HIES 2002. Other cash transfers such as Pension, Disability/relief payment, Rent from properties, Samurdhi welfare transfer, dividends/interests, not specified other income and remittances from local and abroad were considered as income and treated as non-labor income.

Monthly wage income includes wage/salary, tips/overtime payment received during the reference month and average amount for a month from bonus and any arrears received during 12 months period.

Monthly agricultural self-employed income is constructed by considering average monthly net revenue which is equal to total value of output less input cost for both surveys. Self-employed farm income is recorded separately for seasonal and non-seasonal crops in both surveys. At the individual level if the total net revenue is negative figure, income of the individual is treated as zero. Similarly, monthly nonfarm selfemployed income is estimated by deducting monthly input cost from monthly total value of output for both surveys by type of major industries coded. At the individual level if the total net revenue is negative figure, income of the individual is treated as zero.

In addition to above four categories; wage, self-employed farm, self-employed nonfarm, and non-labor income is collected for each income receiver, income received from kind/free which are recorded in expenditure schedules and imputed value of own house are considered as income received in kind (nonlabor) and distributed in per capita terms to all household members. Excluded from the in kind category are all items received in kind corresponding to the same codes excluded from the consumption aggregate, as well as all items belonging to the merceological category cereals and pulses, to minimize the possibility of double counting (as we cannot discriminate between home production and items received as a gift). Total income from all household members is treated as household income.

Similar to the consumption aggregate, income is also adjusted for spatial price variation and not adjusted for monthly price variation during the survey period. Spatial price variation was adjusted using district poverty lines published by DCS.

# **Prices**

All monetary values are expressed in 2012/13 prices. To avoid inconsistencies due to the changes in base year for the consumer price index (as mentioned above), all monetary values for 2001/02, 2006/07 and 2009/10 are adjusted by the factor 1.025. This factor is the ratio between 3,028 (2002’s poverty line inflated to 2009/10 prices using ccpi base 2002) and 2,955 (2002’s poverty line inflated to 2009/10 prices using ccpi base 2006/07). Moreover, all monetary values for the survey year 2006/07 are additionally adjusted by the factor 1.042, which is the ratio between 2,233 (2002’s poverty line inflated to 2006/07 prices using ccpi base-1952) and 2,142 (2002’s poverty line inflated to 2006/07 prices using ccpi base-2002).

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