Haig–Simons income

Haig–Simons income or Schanz–Haig–Simons income is an income measure used by public finance economists to analyze economic well-being which defines income as consumption plus change in net worth. It is represented by the mathematical formula:

I = C + ΔNW

where C = consumption and ΔNW = change in net worth.

Consumption refers to the money spent on goods and services of any kind. From a perfect theory view, consumption does not include capital expenditures, and the full spending would be amortized.