Disposable personal income (DPI) is the amount of money that an individual or household has to spend or save after income taxes have been deducted. It is calculated by subtracting personal current taxes from personal income. DPI is closely monitored by economists as one of the key economic indicators used to gauge the overall state of the economy.
Some key points about DPI include:
- DPI is net income, which is the amount left over after taxes.
- DPI is the portion of income that may be freely spent on discretionary items or activities such as saving, investing, or enjoying leisure time as well as living costs that may not necessarily be imposed but still needed to survive.
- DPI is different from personal income, which refers to all income collectively received by all individuals or households in a country.
- DPI is also different from personal consumption expenditures, which refers to the amount spent on goods and services by households.
- DPI is used to look at how much money is actually available to spend in a specific area.
In summary, DPI is the amount of money that people or families have left over after paying their taxes and other mandated costs, and it is an important economic indicator used to gauge the overall state of the economy.
