Personal Income
A strong economy is characterized by prosperity that is reflected in improving standards of living. Per capita income in the Hampton Roads region increased steadily until the 2007-2009 recession, and it remains higher than its peer MSAs. The region's per capita income is also increasing faster than the rate for Virginia and the United States as a whole.
Why is This Important?
Per capita personal income, which includes wages and salaries, transfer payments, dividends, interest, and rental income, is used as the broadest indicator of the magnitude of improvement in an economy. Rising income levels enable individuals to purchase homes, provide for their families, and improve the quality of their lives.
How is Hampton Roads Doing?
Relative to other regions in Virginia, the Hampton Roads region ranked third highest ($39,576) in per capita income in 2009, exceeded only by the Northern ($59,082) and Central ($40,716) regions.
In 2009, real (adjusted) per capita personal income in the Virginia Beach-Norfolk-Newport News, VA-NC MSA (Hampton Roads MSA) inched ahead of its peers and closed in on the United States average -- quite a difference from 2000, when it had the lowest per capita income among its peers. It has also enjoyed the fastest income growth rate from 2000 to 2009, at 1.9 percent.
What Influences Personal Income?
In the short run, personal income is affected by the strength of the local, state and national economy. In the long run, factors that may influence personal income include tax burdens, public infrastructure, rates of business failure, industry structure, and knowledge stocks. Given the importance of the military bases in the region, Hampton Roads is also influenced by U.S. military expenditures.
Average wages and salaries reflect the productivity and demand for workers and the types of industries in a region. Workers who are better skilled or have relatively more education generally have higher wages. Economic upturns and downturns can influence the demand for workers and, consequently, the wages and salaries employers must offer to attract workers.
Data Definitions and Sources
U.S. Department of Commerce, Bureau
of Economic Analysis.
The growth rate in income is computed using a compound interest formula.
Bauer, Paul, Mark Schweitzer, and Scott Shane, State Growth Empirics: The Long-Run Determinants of State Income Growth, Federal Reserve Bank of Cleveland Working Paper 06-06, May 2006.
See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Hampton Roads Performs.
