The Personal Distribution of Income

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: The Personal Distribution of Income

Author:: Steindl, Josef

Scope:: Typoskript, 28 Seiten

Year of publication:: 1972

Source material date:: August-September 1972

Language:: English

Note:: Mit handschriftlichen Anmerkungen.

Related work:: Steindl, Josef: The Personal Distribution of Income. In: Steindl, Josef: Economic Papers 1941-88. London: Macmillan, 1990, S. 356-371

Topic:: Stochastic processes and size distribution

JEL Classification:: D31 [Personal Income, Wealth, and Their Distributions]

Shelfmark:: S/M.2.1

Access:: Free access

Josef Steindl August-September 1972 The Personal Distribution of Income When D.G. Champernowne showed how you can explain the Pareto law hy a stochastic approach he very naturally chose as an example the distribution of income, because that is the classical case. It appears now that the approach is more easily applied to firms, towns or wealth.-) The case of income is the hardest, so that the great •f r pioneering paper £*& while fully demonstrating a powerful new method, has not entirely disposed of the individual problem which it was dooignod - to -o-olve♦ Champernowne's Model I shall give a simplified version of Champernowne's model 7 r which will throw a new light on its relation to other models of the Pareto law. The income of a person is the state of the system, and its evolution is described by a Harkov chain. The stochastic matrix of income transitions from one year to the next, in desperate simplification, looks as follows; 0 1 2 5 4 5 6 . 0 v q p 1 q P 2 q P 5 q P q p '5 q p • • • • ♦ • U CO CD R •H <D 9 O O fi H

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