Konvolut Wealth and Income Distribution 5

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Konvolut Wealth and Income Distribution 5: wealth, rate of return on wealth, career, hierarchy, earnings and the distribution of income

Author:: Steindl, Josef

Scope:: Typoskript mit handschriftlichen Anmerkungen und Anstreichungen, 7 Seiten, handschriftliche Notizen, 11 Seiten, Konvolut insgesamt 18 lose Blätter.

Year of publication:: ohne Datum

Language:: German English

Note:: Titel und Zusatz zum Titel fingiert. Seiten 1-18 des Typoskripts fehlen.

Topic:: Stochastic processes and size distribution

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

Shelfmark:: S/M.64.1

DOI:: https://doi.org/10.48671/nls.js.AC14446216

20 An Attempted Generalisation In dealing with income of property owners we have chosen as a state variable wealth which evolves slowly in a stochastic process; unearned income can be derived from it by means of another random variable, the rate of return. Can we generalise this two-step expla nation to include also earned income? In a somewhat formal way we could speak of the rank which an individual occupies in one or several hierarchies. Examples of such hierarchies are wealth, education, status, grade (level) of an official or manager, rank of officers, ability, degree of specialisation, grading by popularity of stars etc. Each of these would represent a dimension in what might be called hierarchical space. An individual would occupy a certain point in that space, corresponding to its rank in the various hierarchies, and it would have certain probabilities of transition within a certain time to another point in that space. In other words, an indi viduals' hierarchical position in society (a vector) would be the state variable of a stochastic process. To each point in the hierarchical space corresponds a certain probabi lity distribution of income; the basic rule is that the higher rank means expectation of a higher income.

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