Konvolut The Personal Distribution of Income 1

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Konvolut The Personal Distribution of Income 1

Author:: Steindl, Josef

Scope:: Konvolut aus handschriftlichen und maschinenschriftlichen Blättern (insgesamt 71)

Year of publication:: ohne Datum

Language:: German English

Note:: Titel fingiert. - 2 Kopien einer unveröffentlichten Version des Artikels "The Personal Distribution of Income" von August/September 1972 mit handschrifltichen Anmerkungen und Anstreichungen, zusätzlich einzelne Blätter mit teils handgeschriebenen und -gezeichneten Formeln, Tabellen und Diagrammen.

Topic:: Stochastic processes and size distribution

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

Shelfmark:: S/M.23.1

DOI:: https://doi.org/10.48671/nls.js.AC14446015

12 income. In other words, the mean wealth in low income classes, as measured by the dataphioh we have on the basis of tax assessments very strongly overstates the real mean wealth, and this the more the lower the income. There is no proof, of course, that some curvilinearity would not remain even if full wealth data were available. There may even be theoretical reasons for that, as will be shown later. One reason for linearity of the presumed full data should be mentioned: It is rather queer that non-linearity affects onjy one of the regression lines and the other is perfectly linear. Only the truncation of wealth data gives a pl a usible explanation of this contrast between the two regression lines. Tmuirical data: Holland and 3 we den. The cross-classificaiion of wealth and income, available for the Netherlands and Sweden, will now be discussed in/the light of the theory contained in equation . "Yerification" aan hardly be expected: The rate of return explanation can not nearly explain the income of property owners fully, since a large part of it is earned income. Apart from other statistical difficulties it must be kent in mind that the -arbto coefficient is always more or less arbitrary, since it depends on the range of income or wealth classes included when you measure it. 3ven inconclusive data, however, are better than speculating in the void. An evidence on which I rely heavily is the linear and fairly regular character of the regression of mean income on wealth ( fig 1). The regression coefficient is in most cases around 2/3. but it may be as low as l/2 . Whether the higher moments of income are independent of wealth is not easy to decide. Yhile the variance, in the Swedish data, increases in the higher wealth classes this can plausibly be explained by the increase in the range of these classes ( the last but one wealth class has a range about four times as great as the lower wealth blasses). The same fact is relevant for the comparison of the conditional distribution of income in the various wealth classes: They all have a ^areto tail, the -^areto coefficient being markedly lower in. the last two or three wealth classes * nan in the other s. This, again, may be plausibly explained by the greater range of these high wealth size classes.

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