Toward a Uniform Definition of Household Income

Abstract

By marrying a “top‐down” national income‐based approach with a “bottom‐up” microdata approach, and a national income accounting perspective with a theoretical perspective, this article attempts to provide a unified framework for aggregating income types to create an income definition that enables researchers to make valid comparisons across nations. An examination of several national household income surveys shows that it is next to impossible to quantify all elements of any new definition in a way that makes international comparisons easy. The framework nonetheless illuminates the differences in current practice and allows researchers to assess the effect of those differences on income distribution measures.