The Personal Distribution of Income

Steindl, Josef

Bibliographic data

Works

Document type:: Works

Collection:: Josef Steindl Collection

Title:: The Personal Distribution of Income

Author:: Steindl, Josef

Scope:: Typoskript, 24 Seiten (23 Seiten auf Durchschlagpapier), mit zahlreichen handschriftlichen Anmerkungen und Anstreichungen

Year of publication:: 1972

Source material date:: August-September 1972

Language:: English

Note:: Unveröffentlichtes Typoskript.

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

Shelfmark:: S/M.52.8

Access:: Free access

16 Thus in ur case the inc me is y » K w ^ where we supp se that the distribution >f income and wealth reflects in some way a growth pr cess which has taken place in the past In the ordinary fonulation we should have and after elimination of time y - In c* •» ( w • In c . ) <* . _ A which corresponds to our regression with »v * X (7) how in economics random elements or shocks play a large role and growth is influenced by them. We should therefore write, instead og of the above: W => c . e Y = c ^ £ (t) (t) where £ (t) and Yj (t) are rand m variables. As a result we obtain a ( In ( Y - >j(t) ) - In c ; , * ~ i ln( w - £ (t) ) - In cj (8) The random variables or "err rs" ( not mere ei*r rs of observati n ( f curse ) are in both variables The common tactics of re ressi n is to ascribe all the "e Tors" to one variable only, which yields tw regression lines acc rding to srf whether you choose the one or the other variable as the rep sitory f the errors. The equation (8) will not correspond to either >f the £ two regression lines. -*-t may be guessed that it will lie somewhere between them. ' Let us now start from a different angle and consider the two kinds of relations that exist between income and wealth. One is the influence of wealth on income via the rate of return. It mainly affects unearned income. The other is the influence of past incomes on wealth via the propensity t® save. Since present and past incomes are fairly strongly correlated it will appear as if current income acts qin wealth via the li ' \ propensity to save. I; \ At first sight it seems that the linear regression of income on wealth represents simply the influence of wealth via the rate of ret rn. There is h wever an alternative interpretation. ;

Works

Cite and reuse

Works

Image

Image fragment

Citation links

Citation recommendation