Certainly for the individual the timing of cashing out the stock option and the work done with not coincide. Lumpiness does not seem to be a major issue.
Doug Henwood wrote:
> michael at ecst.csuchico.edu wrote:
>
> >Isn't there a problem with that way of accounting since the compensation
> >and production come in different periods, perhaps years apart?
>
> Ok, just spoke with a guy at the Bureau of Economic Analysis, who
> said: 1) proceeds of exercised options are included in wage & salary
> income - they don't know how much, since it just blends in with the
> rest; 2) the timing problem probably isn't important, since the
> exercises are more or less continuous rather than "lumpy; and 3) the
> option problem probably has little to do with the large statistical
> discrepancy of the last few years. The stat discrepancy is the
> difference between income & product, which conceptually are supposed
> to be equal, since income is earned in production, but aren't in
> practice, since the numbers are estimated separately; product data is
> considered more reliable than income data, but income has been
> exceeding product by a large amount for the last several years, and
> no one at BEA knows exactly why.
>
> Doug
--
Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901