Income Distribution: Line of Reasoning (Fassung 1)

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Income Distribution: Line of Reasoning (Fassung 1)

Author:: Steindl, Josef

Scope:: Typoskript mit zahlreichen handschriftlichen Anmerkungen und Anstreichungen, 6 Seiten, nummeriert und geklammert

Year of publication:: 1975

Source material date:: [15.08.1975]

Language:: English

Description:: Das vorliegende Typoskript samt handschriftlichen Anmerkungen bezieht sich auf Modelle der Einkommens- und Vermögensverteilung von Pareto, Simon und Champernowne.

Note:: Eine weitere Fassung dieses Typoskripts findet sich unter Signatur S/M.70.2. Zusatz zum Titel in Klammer fingiert.

Related work:: Steindl, Josef: The Pareto Distribution. In: Steindl, Josef: Economic Papers 1941-88. London: Macmillan, 1990, S. 321-327 Steindl, Josef: The Personal Distribution of Income. In: Steindl, Josef: Economic Papers 1941-88. London: Macmillan, 1990, S. 356-371 Steindl, Josef: The Distribution of Wealth after a Model of Wold and Whittle. In: Steindl, Josef: Economic Papers 1941-88. London: Macmillan, 1990, S. 328-355 Steindl, Josef: The Distribution of Wealth after a Model of Wold and Whittle. In: Review of Economic Studies, Vol. 39 (3), July, 1973, S. 263-279

Topic:: Stochastic processes and size distribution

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

Shelfmark:: S/M.70.1

Access:: Free access

<') <*-) 0*1 t\ Simon on executives -'JV L First assumption: A constant span of control at all levels of the hierarchy, ^THis ought really to he a random variable.} This leads to: jj^S) size ( number of executives^according to Simon, but a reasonalle measure would bi capital or sales)^(L) level of the hierarchy^] In S = L In n + constant, Second assumption: & constant ratio between a man's salary and that of his subordinate.^b^ (also that ought tojbe a random variable )- That is used to determine the salary of the top executive in ('fafrd j ! terms of those at other levels: In C = L In b + eonstant^ By elimination of the level L we obtain n _ In b tv In C = , , , , In b — In S + cpnstant - constant — the salary of the top(official »')Manager is a function of size of company^ ^ that is the xsxizx relation empirically observed by Roberts. It might be hoped that Roberts relation also holds more generally for all organisations like hospitals, city administrations etc. although the measure of size becomes again more prob/elematic (employment? which would however not fit automatized corporations). Simon now passes to another empirical observation, made by Bavis, The frequency distribution or density of executive's salaries at General Motors in 1936 Wfas a -^arato distribution: f°' : C' = m N~ 0 *^ f C': salary , N;number of executives receiving (P ' O/ The number of markers at level L' from the top is N ( L' ) = n L '" 1 Simon now writes from assumption 2 C'(L') = M b 1 L ' 1 . AJi but his M must be logically equal to the to^/salary C, although he does hot say so. The equation obtained by eliminating L' is therefore inc '"4H- lnK U W■ , ^ V jfa. N =\L , -l)fa**' ■fa, £* ~ fa~ M 6m, & 'tv

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