How Is Permanent Income Measured? An alternate, and more conventional, approach to the measurement of permanent income is in terms of a weighted average of past incomes, that is, Yp =XWtYt, t =-x . where Wt are the weights and Yt the measured income in time period t. What do you mean by permanent income?
What Is The Difference Between Transitory And Permanent Income? Permanent income can be thought of as the average flow of income one expects to receive—in good years income will be above its permanent level and in bad years it will be below its permanent level. This difference between permanent and current income is referred to
What Is The Difference Between Permanent Income Hypothesis And Life Cycle Hypothesis? In the case of the life-cycle hypothesis, current consumption would remain a function of total lifetime resources, although the relationship would no longer be one of strict proportionality. In the permanent income hypothesis, cP remains a function of Wand hence, of permanent income