The addition to an individual’s utility consequent on a small increase in their income, per unit of the increase. If an individual is risk-averse the marginal utility of income is a decreasing function of income. The marginal utility of income is constant for a risk-neutral individual, and increasing for a risk-loving individual. In a single-period analysis there is no distinction between the marginal utility of income and the marginal utility of wealth. In a multi-period analysis income is a flow and wealth is a stock. Consequently, the two marginal utilities become distinct.