ABSTRACT
This chapter focuses on the relative importance of different formal and informal incomes of households in determining decreasing or ascending life situations. It discusses the source and composition of incomes. The sources of households' incomes can be grouped as follows: from work; from transfers; from assets; and from illegal activities. As long as the incomes are officially registered and, when necessary, the subject of taxation, they are considered formal incomes. The non-compliant behaviour that nourishes the informal sector turns all 'cracks' in the legal framework into opportunities for personal benefit. The chapter explains the procedure in researching and verifying informal incomes, the incidence of their different forms and their importance in household budgets. It comments on the relationship between formal and informal income and poverty and discuss income inequalities and social backgrounds, with particular emphasis on the very poor and the rich.
