-Sa
lt will be noted that the process can be described up to
this point without any reference to income. We may regard the
states of the system represented by the elements of the matrix
as "grqdes" or "age" - possibly carreer age or age in earning
life, although in conformity with Champernowne we referred to
them as income classes.
We have now to define the income In relation to the class
intervals of the matrix; The lower limit of class 1 is
taken to be the minimum income. We may choose the income
units such that the minimum income is unity, i.e. on the
logarithmic scale it is zero. The income y^ at the lower
limit of successive income classes K is defined by
Jk -
e* h
or In y K = Kh
c*-)
where h is the size of the class interval on the log scale
D
TT
The dilfLculties arising from the discrete representation of
a continuous income variable in the matrix do not concern
us here. See £,oJ p. 62. 7Z*, /
'/
'
^ /
b * C i- a 7 *1 c- by
■'%