Income is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.[1][2][3]However, for households and individuals, "income is the sum of all the wages, salaries, profits, interest payments, rents, and other forms of earnings received in a given period of time."[4]

In the field of public economics, the term may refer to the accumulation of both monetary and non-monetary consumption ability, with the former (monetary) being used as a proxy for total income.

Gross income can be defined as sum of all revenue. Net income = Revenue − Expenses.[3]

Increase in income

Income per capita has been increasing steadily in almost every country.[5] Many factors contribute to people having a higher income such as education,[6] globalisation and favorable political circumstances such as economic freedom and peace. Increase in income also tends to lead to people choosing to work less hours.Developed countries (defined as countries with a "developed economy") have higher incomes as opposed to developing countries tending to have lower incomes.

Economic definitions

In economics, "factor income" is the return accruing for a person, or a nation, derived from the "factors of production": rental income, wages generated by labor, the interest created by capital, and profits from entrepreneurial ventures.[7]

From labor services, as well as ownership of land and capital.[citation needed]

In consumer theory 'income' is another name for the "budget constraint," an amount to be spent on different goods x and y in quantities and at prices and . The basic equation for this is

This equation implies two things. First buying one more unit of good x implies buying less units of good y. So, is the relative price of a unit of x as to the number of units given up in y. Second, if the price of x falls for a fixed , then its relative price falls. The usual hypothesis is that the quantity demanded of x would increase at the lower price, the law of demand. The generalization to more than two goods consists of modelling y as a composite good.

The theoretical generalization to more than one period is a multi-period wealth and income constraint. For example, the same person can gain more productive skills or acquire more productive income-earning assets to earn a higher income. In the multi-period case, something might also happen to the economy beyond the control of the individual to reduce (or increase) the flow of income. Changing measured income and its relation to consumption over time might be modeled accordingly, such as in the permanent income hypothesis.

Full and Haig-Simons income

"Full income" refers to the accumulation of both the monetary and the non-monetary consumption-ability of any given entity, such as a person or a household. According to what the economist Nicholas Barr describes as the "classical definition of income" (the 1938 Haig-Simons definition): "income may be defined as the... sum of (1) the market value of rights exercised in consumption and (2) the change in the value of the store of property rights..." Since the consumption potential of non-monetary goods, such as leisure, cannot be measured, monetary income may be thought of as a proxy for full income.[3] As such, however, it is criticized[by whom?] for being unreliable, i.e. failing to accurately reflect affluence (and thus the consumption opportunities) of any given agent. It omits the utility a person may derive from non-monetary income and, on a macroeconomic level, fails to accurately chart social welfare. According to Barr, "in practice money income as a proportion of total income varies widely and unsystematically. Non-observability of full-income prevent a complete characterization of the individual opportunity set, forcing us to use the unreliable yardstick of money income.

Other Languages
Afrikaans: Inkomste
العربية: دخل مالي
تۆرکجه: گلیر
বাংলা: আয়
беларуская: Даход
български: Доход
català: Ingrés
Cymraeg: Incwm
dansk: Indkomst
Deutsch: Einkommen
Ελληνικά: Εισόδημα
español: Ingreso
Esperanto: Rento
euskara: Irabazi
فارسی: درآمد
français: Revenu
한국어: 수입 (회계)
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hrvatski: Dohodak
italiano: Reddito
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Latina: Reditus
lietuvių: Pajamos
Bahasa Melayu: Pendapatan bersih
မြန်မာဘာသာ: ဝင်ငွေ
Nederlands: Inkomen
नेपाली: आय
日本語: 収入
norsk: Inntekt
ਪੰਜਾਬੀ: ਆਮਦਨ
polski: Dochód
português: Renda
română: Venit
русский: Доход
Scots: Income
sicilianu: Ngressu
Simple English: Income
srpskohrvatski / српскохрватски: Prihod
svenska: Inkomst
Tagalog: Kita
தமிழ்: வருவாய்
татарча/tatarça: Керем
Türkçe: Gelir
українська: Дохід
中文: 收入