Disposable income is total personal income minus personal current taxes.

[1] In national accounts definitions, personal income, minuspersonal current taxes equals disposable personal income. Subtracting personal outlays (which includes the major category of personal (or, private) consumption expenditure) yields personal (or, private) savings. Restated, consumption expenditure plus savings equals disposable income after accounting for transfers such as payments to children in school or elderly parents¶ living arrangements.
[4] [3] [2]

The marginal propensity to consume (MPC) is the fraction of a change in disposable income that is consumed. For example, if disposable income rises by $100, and $65 of that $100 is consumed, the MPC is 65%. Restated, the marginal propensity to save is 35%.

Discretionary income is income after subtracting taxes and normal expenses (such as rent or mortgage, utilities, insurance, medical, transportation, property maintenance, child support, inflation, food and sundries, &c.) to maintain a certain standard of living.[5] It is the amount of an individual's income available for spending after the essentials (such as food, clothing, and shelter) have been taken care of: Discretionary income = Gross income - taxes - necessities Despite the formal definitions above, disposable income is commonly used to denote discretionary income. The meaning should therefore be interpreted from context. Commonly, disposable income is the amount of "play money" left to spend or save. The Consumer Leverage Ratio is the expression of the ratio of Total Household Debt to Disposable Income.

What Does Discretionary Income Mean? The amount of an individual's income that is left for spending, investing or saving after taxes and personal necessities (such as food, shelter, and clothing) have been paid. Discretionary income includes money spent on luxury items, vacations and non-essential goods and services. Discretionary income is derived from disposable income, which equals gross income minus taxes. Aggregate discretionary income levels for an economy will fluctuate over time, typically in line with business cycle activity. When economic output is strong (as measured by GDP or other gross measure), discretionary income levels tend to be high as well. If inflation occurs in the price of life's necessities, then discretionary income will fall, assuming that wages and taxes remain relatively constant. Discretionary spending is an important part of a healthy economy - people will only spend money on things like travel, movies and consumer electronics if they have the funds to do so. Some people will use credit cards to purchase discretionary goods, but increasing personal debt is not the same as having discretionary income.

This is a very importantmeasure to determine not only an individual's overall economic health but the health of society as a whole. their house. selling such items as stationery. See also discretionary income. exchange rates and unemployment. Marketers love to target the DINKS and SINKS because they have lots of discretionary incomeand no children to spend it on. Z Discounters operations that take short-term leases in unlet units in malls. confectionery and gifts at deeply discounted prices Z Discretionary income disposable income that is available for .Disposable income is the income that is left over after an individual has paid all personal income taxes. .. Disposable income is one of the primary measures of personal wealth but it is not the only measure that can be used Some of the important causes for the growth of rural markets are ± * The rise in disposable income of the rural families Disposable Income: The amount of money that individuals have after removing taxes and other required payments. Disguised Survey A technique in which the respondent is not told the real purpose of a researchstudy. Economic indicators such as inflation levels. which is used for spending or saving Levels of average disposable income. toys. so they spend their extra money on themselves. interest rates. Taxation policy in the target market. such as offering student prices under the assumption that students have less disposable income and therefore will be more likely to forgo the purchase if required to pay the full price. Full article>>> Discretionary Income Money left after paying taxes and buying necessities.Disposable income is then available to spend as the consumer wishes.. their pets and vacations. Is the political and legal landscape changing in any way? In other cases group assignment is specific. Disposable income after-tax income.

In such cases a PPP exchange rate is likely the most realistic basis for economic comparison. The PPP method is used as an alternative to correct for possible statistical bias. Also. PPP exchange rates are especially useful when official exchange rates are artificially manipulated by governments. Per capita income is reported in units of currency. of the yearly income that is generated in the country through productive activities. Also. It does not necessarily mean that Mexicans are poorer by a half. this exchange rate results from international trade and financial markets. Countries with strong government control of the economy sometimes enforce official exchange rates that make their own currency artificially strong. to buy capital assets whose prices vary more than those of physical goods. if the value of the Mexican peso falls by half compared to the U. The exchange rate reflects transaction values for traded goods among countries in contrast to non-traded goods. the currency's black market exchange rate is artificially weak. Per capita income is also a measure of the wealth of a population of a nation when compared with other countries. dollar. The idea originated with the School of Salamanca in the 16th century [1] and was developed in its modern form by Gustav Cassel in 1918. [2] The concept is founded on the law of one price. It is expressed in terms of commonly used international currency such as Euro. the Mexican Gross Domestic Product measured in dollars will also halve. that is.. different interest rates. e. goods produced for home-country use. Per Capita Income Meaning and Significance Per capita Income means how much an individual earns. However. Measuring income in different countries using PPP exchange rates helps to avoid this problem.GDP adjusted to ppp Purchasing power parity (PPP) is a theory of long-term equilibrium exchange rates based on relative price levels of two countries. By contrast. Per capita income reflects the gross national product of a country. The Penn World Table is a widely cited source of PPP adjustments. hedging or interventions by central banks can influence the foreign-exchange market. .g. if incomes and prices measured in pesos stay the same. For example.S. the idea that in absence of transaction costs. identical goods will have the same price in different markets. and the so-called Penn effect reflects such a systematic bias in using exchange rates to outputs among countries. they will be no worse off assuming that imported goods are not essential to the quality of life of individuals. speculation. currencies are traded for purposes other than trade in goods and services. It means the share of each individual when the income from the productive activities is divided equally among the citizens.

5 per cent to Rs 44. Population below poverty line: 25% (2007 est.) Rank: 85 Definition: National estimates of the percentage of the population falling below the poverty line are based on surveys of sub-groups.171 crore (Rs 62.6 per cent last fiscal if it is calculated on the basis of 2004-05 prices. Per capita income (at 2004-05 prices) stood at Rs 33. Source: CIA World Factbook .31. this Atlas method of calculating the per capita income of India is not determined by using purchasing power parity. Economist have been giving considerable importance to the performance of states vis a vis each other in terms of per capita income.74.749 as calculated by the Central Statistical Organisation (CSO) in its advance estimates for FY10. The size of the economy rose to Rs 62. Definitions of poverty vary considerably among nations. Per capital income means income of each Indian if national income is evenly divided among the country's population of 117 crore (Rs 1.821 in the previous year. rich nations generally employ more generous standards of poverty than poor nations.141 in the year-ago period.345 in 2009-10 against Rs 40. T he per capita income grew by 10.8 per cent over Rs 55. according to the government data.7 trillion) in FY09. However. according to estimates of national income released. per capita income grew by 5.449 crore (Rs 55.17 billion). up 11.3 trillion) in the last fiscal. 2010 . which essentially adjusts exchange rates for purchasing power of currencies. For example.Unless otherwise noted.Dollars because these currencies are widely known. Per Capita Income In India India's per capita income is found by the Atlas method and by employing official exchange rates for conversion. which is a better way of comparison and broadly factors inflation. information in this page is accurate as of February 19. Further.588 in FY10 against Rs 31. It has been observed that those states that were more open and better adapted to economic liberalization have overall shown faster rate of growth. The per capita income was slightly higher than Rs 43. with the results weighted by the number of people in each group.

inflation stood at 15.10% .