Developing Statistics on the Distribution of State Personal Income: Methodology and Preliminary Results

In recent years, a growing interest in the topic of income inequality has fueled demand for information on the way in which the nation’s prosperity and growth are shared across households, as a complement to published data on total income and output. This paper details the methodology and presents preliminary measures of distribution of income at the regional level. These are based on personal income, a primary economic indicator published by the Bureau of Economic Analysis, and measure how personal income is distributed across households in each state and the District of Columbia. The methodology allocates detailed components of state personal income to households based on household data from the Current Population Survey supplemented with other sources. The household-level data are then aggregated to generate state-level bottom-up inequality statistics, including Gini coefficients, medians, and quintile shares of state personal income. The results show that many of the trends in inequality are similar across measures.