Individual and household weights are provided in the CPS. When producing the distribution of income at the individual level (e.g. the distribution of personal income), the individual weights should be used. However, whether you should use the individual or household weights in examining the distribution of household income depends on which of two distributions you are interested in:
- The distribution of household income across individuals
- The distribution of household income across households
The former will compute an income distribution that gives more weight to larger households. The latter will give equal weight to households, regardless of their size. In most cases, you want the latter.
Similarly, you might think carefully about the use of weights for family versus household income. While family income is a household variable, it is difficult to conceptualize the distribution of family income for a nationally representative sample of households.