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

Rights of use:: In Copyright

Access:: Free access

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

Income sind health: -muirical Patterns The following remaiprs refer to the cross-classifications of wealth and income published in Holland and Sweden. These data show certain characteristics which are found aJ.so in other cross-section data concerned with size distributions, especially data from official publications like censuses etc. The first feature is that the great bulk of the observations is concentrated in the corner of the first ( the north-east ) quadrant. In other wards these distributions are very skew. A great many of the units are small in either dimension. The second feature is that the wealth distribution is heavily truncated ( in Sweden for example at 150.000 crowns) while the income distribution is given down to rather low levels. If the mean income in the various wealth classes is calculated a. linear regression of a very regular pattern is obtained. ( This "regression of the first kind" as we may call it differs from the usual least squares regression in that it does not assume a -priori a certain mathematical function for the regressionf see Harald Cramir, Mathematical Metheds of Statistics,Princeton 19^6^3»— if the regression of the means turns out to be linear as is the case here, then it shoild be the same as the result of a linear least squares regression; this may be not quite true only in so far as we fail to use weights for the means corresponding to the various frequencies in the different wealth classes ). The same regression of the first kind in the other dimension - wealth on income - gives a completely different picture: r he mean wealth in the lower income classes does not indrease with income at all;- for higher incomes it increases very strongly, so that a strongly curved regression line results. At least one, and probably the most important reason for the curvi—linearity of this regression line lies in the truncation of the wealth data. If we try to fill in the missing wealth data in our imagination, according to plausible and common sense prior knowledge, we find that the regression'of wealth on income might well be quite linear and rather steep; at least it would be very much nearer to linearity than it is now. The inclusion of cases ■ with wealth below the tax limit, which is probably the lower and the more freauent the lower the income, would reduce the mean wealth * ^ . 7 mf - . ‘ . in all income classes but it w'uld reduce it the more the lower the

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