Two of the most widely used measures of household income are BEA’s personal income and the Census Bureau’s money income. These two statistics spring from different traditions of measurement—personal income from national income accounting and money income from income distribution analysis. Yet, many of the conceptual difficulties in developing guidelines for income distribution statistics are the same or similar to the problems encountered in specifying guidelines for national income accounting.

This paper first considers briefly what is meant by the concept “income” and how the debate about the boundaries defining income has been framed. Then, personal income and money income are compared conceptually and empirically. This comparison highlights certain ways that the two measures differ—in the inclusion or exclusion of lump sum payments, of income of non-profit institutions serving households, and of inkind payments; in the treatment of pension accruals versus disbursements; and in adjustments for underreporting.

Both personal income and money income are more limited concepts than the Haig- Simons-Hicks (HSH) theoretical concept of income as the maximum amount that can be consumed in a given time period while keeping real wealth unchanged. Both personal and money income, for example, do not capture income from capital gains. The Census Bureau has developed a set of alternative measures of money income designed to better measure economic well-being. These are briefly reviewed in the paper.

The final section of the paper discusses possible further extensions of the two income measures. Alternative measures of personal income are proposed that move away from an accrual and toward a disbursement approach to accounting for retirement income and that incorporate disbursements from a variety of tax-preferred assets. The alternative personal income measures address user needs to better measure the tax base or the capacity to spend.