What is disposable income?
- Content Type:
- Glossary
Disposable Income Definition
The income available to persons for spending or saving after taxes have been deducted. Also known as discretionary income.
Disposable income is the amount of money available to a person or household after taxes and essential expenses like housing, food and utilities have been deducted. Also known as discretionary income, this concept directly impacts consumer behavior and purchasing decisions. In marketing research, disposable income is a key indicator for potential spending on non-essential goods and services, revealing trends in consumer sentiment, economic conditions and overall market health. Marketing professionals use disposable income data to identify market segments that can purchase their products or services.
Who relies on disposable income?
Marketing professionals, businesses and policymakers use disposable Income data to understand the purchasing power and spending habits of consumers within specific demographic segments. This information can be used to determine strategies for product development, pricing and targeted advertising.
Why should I care about disposable income?
The concept of disposable income provides insights into the ability and willingness of consumers to spend on discretionary items. This information is invaluable for making business decisions and staying competitive in the market.