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County and metropolitan area personal income, 1987-89.

Revision Schedule for Regional Estimates

The annual estimates of State and local area personal income for a given year are subject to successive refinement. Preliminary State estimates, based on the current quarterly series, are released 4 months after the close of the reference year and published in the April SURVEY OF CURRENT BUSINESS. In the August SURVEY, more reliable annual estimats are published. These estimates are developed independently of the quarterly series and are prepared in greater component detail, primarily from Federal and State government administrative records. The annual estimates published in the August SURVEY are subsequently refined to incorporate newly available information used to prepare the current local area estimates. These revised State estimates, together with the current local area estimates, are published in the following April SURVEY. The annual estimates emerging from this three-step process after further revised for several succeeding years (the State estaimtes in April and August and the local area estimates in April), as additional date become available. The routine revisions of the local area estimates for a given year are normally completed with the third April release. After that, the estimates will be changed only to incorporate a comprehensive revision of the national income and product accounts--which takes place approximately evey 5 years--or to make important improvements to the estimates through the use of additional or more current State and local area data.

THIS article presents summary estimates of total and per capita personal income for 1987-89 for metropolitan areas and counties. Table 1 contains estimates for county-based metropolitan areas as defined for statistical purposes by the U.S. Office of Management and Budget. These areas include consolidated metropolitan statistical areas (CMSA's)--large, complex areas that consist of two or more primary metropolitan statistical areas (PMSA's)--and metropolitan statistical areas (MSA's). The metropolitan areas in New England are defined in terms of cities and towns rather than counties; the estimates presented here are for the alternative area definition--New England county metropolitan areas (NECMA's). (1) Table 2 contains estimates for 3,106 counties and county equivalents. The smaller independent cities of Virginia are combined with adjacent counties in these estimates.

The 1989 estimates are presented for the first time. The 1987 and 1988 estimates are revised and supersede those presented in the April 1990 SURVEY OF CURRENT BUSINESS. The estimates for 1984-89, including income by major type and labor and proprietors' earnings by Standard Industrial Classification (SIC) industry dvision, will be presented in the forthcoming five-volume set Local Area Personal Income, 1984-89. A detailed description of the sources and methods used to derive the estimates will be included in each volume. The full set of estimates for 1969-89, in greater industrial detail, is available in several forms from BEA's Regional Economic Information System, as explained on page 37.

Definition of total and per capita

personal income

The personal income of an area is defined as the income received by, or on behalf of, all the residents of the area. It consists of the income received by persons from all sources--that is, from participation in production, from both government and business transfer payments, and from government interest. Personal income is measured as the sum of wage and salary disbursements, other labor income, proprietors' income, rental income of persons, personal dividend income, personal interest income, and transfer payments, less personal contributions for social insurance.

In the national and regional economic accounts, persons are defined as individuals, nonprofit institutions serving individuals, private noninsured welfare funds, and private trust funds.

The definitions underlying the local area estimates of personal income are essentially the same as those underlying the personal income estimates in the national income and product accounts. The major difference is that the national estimates include the income of residents of the United States temporarily working abroad, whereas the local area estimates consist of only the income of persons residing in the 50 States and the District of Columbia. Specifically, the national personal income estimates include the income of Federal civilian and military personnel stationed abroad and of U.S. residents who are employed by U.S. firms and are on temporary foreign assignment. An "overseas" adjustment is made to the national estiamtes to exclude the labor earnings of these workers from the U.S. totals before the totals are extended to the State and local area levels.

Per capita personal income is computed by dividing the total personal income of an area by the population estimate for that area. For 1987-88, the population estimates were provided by the Census Bureau; for 1989, BEA prepared county population estimates based on the Census Bureau 1989 State estimates and on the 1986-88 trend in the Census Bureau county estimates. Except for the college student population, which is measured as of April 1, the population for all years is measured as of July 1.

The local area per capita personal income estimates should be used with caution for several reasons. In some instances, an unusually high or low per capita personal income is the temporary result of unusual conditions, such as a bumper crop or a hurricane. In other instances, the income levels of certain groups atypical of the resident population may cause a longer term high or low per capita personal income that is not indicative of the economic well-being of the area. For instance, a major construction project--such as a defense facility, power plant, or dam--may substantially raise the per capita personal income of an area for several years because it attracts highly paid workers whose income is measured at the construction site. The high per capita income is not indicative of the economic well-being of most of the resident of the area (or, in many cases, of the resident construction workers themselves, because they frequently send a substantial portion of their wages to their dependents living in other areas).

Conversely, the presence of a large institutional population--such as that of a college or prison--will tend to keep the per capita personal income of an area at a lower level because the residents of these institutions have little income attributable to them at these institutions. This lower per capita personal income is not indicative of the economic well-being of most of the residents of the area (or, in some cases, of the institutional populations, because some of these populations, such as college students, typically receive support from their families living in other areas).

The per capita personal income estimates can also be misleading in areas where population changes rapidly. Population is measured at midyear, whereas income is measured as a flow over the year; therefore, a significant change in the population of an area during the year, particularly if it occurs around midyear, can cause a distortion in the per capita personal income estimate.



(1) For a discussion of the metropolitan area concepts and a list of the areas and their components, see U.S. Department of Commerce, Bureau of the Census, Statistical Abstract of the United States: 1991 (Washington, DC U.S. Government Printing Office, 1991), Appendix II.
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Publication:Survey of Current Business
Date:Apr 1, 1991
Previous Article:Personal income by region, fourth quarter 1990.
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