Income Variables

Income Variables

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Income Variables

IHDS is one of the first Indian surveys to collect detailed income data. Most surveys depend on consumption expenditures or household assets to measure a household’s economic level. IHDS collected those data also (see consumption and household assets, but went to great lengths to measure household income as well. Over 50 different income sources were queried. The public use file collects those sources into eight major income types (incfarm .. incother) plus a total income variable (income). All are household-level variables, but all are included in both the household and individual data files.

Variable N obs Unique Values Unwtd. Mean Min Max Label
income 41554 21111 54428.3 -107350 6520261 HH5-15 3-8 Total income
incfarm 41554 17098 10265.92 -107350 4817152 HH6-10 4-6 Family farm inc
incagwage 41554 1273 3242.46 0 155000 HH11 6.8+ hh ag wages
incnonag 41554 1372 5552.11 0 292000 HH11 6.8+ hh nonag wages
incsalary 41554 2394 20616.48 0 960000 HH11 6.8+ hh salaries
incbus 41554 844 10127.89 0 6190000 HH11-14 7. Net business inc
incremit 41554 188 1436.6 0 610000 HH5 3.13 Sum hh remittance
incgovt 41554 395 221.42 0 200000 HH15 8.7-13 govt benefits
incother 41554 564 2965.43 0 500000 HH15 8.1+ property, pensions

The most difficult income source to estimate is farm income (incfarm). Over half of IHDS households had some farm income, so this is an important component of the total income estimate. IHDS asked about crop production and prices, use of crop residues, animal ownership and home-produced animal and crop products, expenses for a variety of farm inputs, and agricultural rents paid and received. IHDS staff continue to work on refining these data to produce the best income estimates possible.

Negative farm income is reported by about 9 percent of the sample. Crop failures and high expenses are a frequent source of debate in India so this estimate seems reasonable. Negative farm incomes result in negative total income estimates for about 1 percent of the households. Other analyses by IHDS staff suggest that these households do not appear as poor on other economic dimensions as households with low but positive incomes. Data users may want to consider restricting income analyses to the sample of households with positive income (or income >= Rs. 1000) and adding separate analyses for the negative or very low income households.

Wage and salary incomes were summed across all jobs of all individuals in the household. Annual totals were estimated using the report of days worked for workers paid daily wages or monthly salaries. Meals, housing benefits, and bonuses are included in these totals. The public use file divides wage and salary incomes into three subtypes: incsalary salary income is defined as income earned monthly or annually (rather than daily); incagwage agricultural wages are the total daily wages of workers with agricultural occupations; and incnonag nonagricultural wages are all other daily wages.

Remittances (incremit) were totaled from item 3.13 of the non-resident schedule (page 5 of the household questionnaire).

Nonfarm business income (incbus) was sometimes reported only as net income without specifying gross income and expenses. Therefore, net business income does not always equal gross business income minus expenses.

IHDS also collected data on several sources of cash and noncash support not included in the total income estimate because these sources are not properly defined as income. For example, about 2% of households sold some land in the previous year (in4a and in4b); 1% received insurance payments (in6); and about nine percent had received some housing support such as latrines, stoves, or housing materials (in14 and in15). These data are available in the IHDS files but are not included as income. The following table details some of the income sources used to calculate total income:

Variable Description Mean all hh % nonzero Max
income Total Income 48,335 100% 6,520,261.00
ws8annhh Wage & salary 25,949 71% 960,000
  - ws8pay regular pay 25,485 71% 960,000
  - ws9meal meals 141 9% 12,600
  - ws9rent housing 137 1% 90,000
  - ws10 bonuses 185 7% 26,000
incagwage agricultural wages 3,472 29% 155,000
incnonag nonagricultural wages 5,391 27% 292,000
incsalary salaries (monthly/annual-pay) 17,085 28% 960,000
incbus Nonfarm business 8,891 20% 6,190,000
  - nf3hh gross receipts 23,469 19% 19,000,000
  - nf4hh expenses: labour 1,398 5% 900,000
  - nf5hh expenses: other 13,180 15% 16,000,000
incfarm Net Agricultural Income 9,331 53% 4,817,152
  - fm15*fm18 Gross crop income 10,188 38% 4,913,500
  - fm19Rs Total value of crop residue 770 34% 200,000
     -- fm19aRs Residue sold 214 9% 64,000
     -- fm19bRs Residue kept for own use 556 30% 200,000
  - fmexpense Total crop expenses 3,578 38% 324,502
      -- fm20b Hired farm labour 719 23% 90,000
      -- fm20cRs Meals to hired labour 33 8% 16,000
      -- fm21a Seeds 633 37% 90,000
      -- fm22 Fertilizers 831 35% 96,000
      -- fm23 Pesticides 265 21% 99,990
      -- fm24 Irrigation 189 13% 50,000
      -- fm25 Hired equipt/ animals 467 26% 87,120
      -- fm26i Interest on loans 52 3% 60,000
      -- fm27 Miscellaneous expenses 389 14% 98,000
  - animalRs Animal gross income 3,099 39% 1,117,774
      -- an2a+an2b marketed: milk, eggs, animals 1,279 16% 1,000,00
      --  co8,11,12,13 home grown milk, eggs, meat 1,336 21% 260,160
      -- half: co8,11,12,13 partially home grown 45 2% 75,600
      -- an1a,b,c estimate dung value 323 35% 72,932
      -- an1e estimate wool value 8 1% 14,753
      -- animalRsx1.03 est. reproduction of animals 108 39% 38,842
  - anexpense Expenses for animals 1,532 40% 600,000
      -- an4a home grown grain 269 21% 55,000
      -- an4b home grown residue 616 30% 99,000
      -- an4c purchased grain & residue 647 28% 600,000
  - incagprop Agricultural property income 745 7% 99,000
      -- fm6c Rs. income from land rented out 294 2% 90,000
      -- fm6e Rs. income from sharecropped land rented out 258 3% 85,000
      -- fm32i Equipment rented out, income 192 2% 99,000
      -- fmrentexp Agricultural rents paid out 361 6% 284,000
         --- fm8c Rs paid for land rented in 105 2% 90,000
         --- fm16Rshh Landlord's share of sharecropped land rented in 257 4% 284,000
incremit Remittances 1,447 8% 610,000
incother Property & Other Income 2,511 10% 500,000
  - in1 renting property 386 3% 500,000
  - in2 interest, dividends 237 2% 500,000
  - in3a pensions: government 1,703 5% 400,000
  - in3b pensions: private 99 0% 200,000
  - in16 other income 86 1% 100,000
incgovt Public benefits 205 13% 200,000
  - in5 scholarships and gifts 114 7% 200,000
  - in7c National Old Age pensions 45 2% 8,400
  - in8c Widows' Pension Scheme 23 1% 12,000
  - in9c National Maternity Scheme 2 0% 4,950
  - in10c National Disability Pension 4 0% 6,200
  - in11c Annapurna 9 1% 6,000
  - in12c Other government transfers 7 1% 10,000
  - in13c NGO or other assistance 2 0% 7,000

** A note on UNEARNED:
 

UNEARNED is an individual level variable, not a household variable.

UNEARNED = Total hh income – individual’s annual earnings from wage and salary - earnings from business - earnings from farm - earnings from animals

That is, each individual's own wage and salary, farm, nonfarm business, and animal income are all treated as earned income for each individual in the household.  Estimates for earnings from farm, business, and animals are based on the %of household time that each individual has spent on that activity. 

Everything else (including earnings from other household members!) is unearned for that individual.

UNEARNED is the conventional measure of the disincentive for labor force participation and so especially important for analyses of changing women's labor force participation.

 

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