Definition
The sum of money income received by all household members aged 15 years and over during the 12 months prior to the interview date. This includes earnings, self-employment income, interest, dividends, social security, public assistance, and retirement income.
Why It Matters
This is a primary indicator of a household's economic well-being and purchasing power. It directly influences consumption patterns, discretionary spending, and overall market demand for goods and services across various price points.
Specific Relevance for Professionals:
Marketers
Fundamental for segmenting markets by purchasing power and targeting products/services based on affordability. Knowing the income levels of households in a target area helps tailor product features, pricing strategies, and advertising messages to align with consumer financial capacity.
Researchers
Essential for studying economic disparities, income inequality, and the financial well-being of different demographic groups. It serves as a key variable in analyses of social mobility, poverty rates, and the economic impact of various policies or trends.
Consultants
Crucial in market feasibility studies to assess the economic viability of new ventures or expansions. It helps clients determine if a target market possesses sufficient income to support their business model, particularly for retail, real estate, and financial services.
Public Policy Workers
Vital for assessing economic health, identifying areas with high concentrations of low-income households for social programs, and understanding the financial capacity of communities to support local taxes or services. It informs housing affordability policies and economic development initiatives.
