11 -
coefficient (since k 41). This is exactly what had to be explained
(the Income distributions are “more equal* than the wealth distribu
tions, empirically). The particular shape of the rate of return distrl
bution has no influence on the result, as long as it fulfills Idle
Independence conditions mentioned. Unfortunately, as we shall see,
this is not always the case.
The income of property owners
Some empirical data will illustrate the above theory. While this
theory deals with property income, the data below rather refer to
income of property owners, which in part is earned income. Zt is not
easy to separate the earned and unearned income 1). Nor are the two
parts Independent, so that a convolution of two separately derived
distributions would not be appropriate.
In the following, incomes of property owners will be
treated as a whole. The distribution of the rate of return
or conditional distribution of income therefore includes
earned income here. The regression of property owners' total
income on their wealth can be studied on the basis of Dutch
rsj
data'll) (fig.3). The regression is linear and the variance of
Income is not much different in different wealth classes;
the correlation coefficient is 0,5, the regression coefficient
1) Attempts to separate them such as in /5/ are unconvincing.
Xn this study, compensation for risk is Included in earned income,
but by its nature it is obviously related to capital.