Definition
Divides individuals' earnings (from wages, salary, and self-employment) into specific predefined ranges or brackets (e.g., less than $20,000; $20,000 to $49,999; $50,000 to $99,999; $100,000 or more).
Why It Matters
Provides a clear picture of how earnings are spread across a population, highlighting concentration in certain income bands. This is crucial for understanding the economic tiers and purchasing power within a market.
Specific Relevance for Professionals:
Marketers
Essential for highly targeted marketing. Allows for precise segmentation by earning capacity, enabling marketers to tailor product offerings, pricing strategies, and messaging to align with specific income brackets, from value-oriented to high-end.
Researchers
Fundamental for studying earning inequality, the prevalence of low-wage work, the distribution of high earners, and the impact of economic policies on different earning strata.
Consultants
Crucial for market sizing and assessing the economic viability of products or services designed for specific earning tiers. It helps clients understand the financial landscape and target potential customers effectively.
Public Policy Workers
Vital for analyzing earning disparities, identifying concentrations of low-wage earners for intervention, and informing tax policies or workforce development programs aimed at improving economic mobility across different earning brackets.
