15
The conditional distributions have all Pareto tails although the
fit is bad ( only 4 values can be used ). The Pareto coefficient
is between 3 and 4 la all except the last two wealth classes,
where it is very low, and it is 2,68 for the whole income distribution.
It appears that the inc >me distribution as a whole is -
as far a3 its tail is concerned - decisively influenced by the
last two wealth classes. This is due t the fact that n st
of the t >p inc ne receivers are in the last iw wealth classes,
where the inc me diotributi n is very unequal simply owing
to the wide range f wealth in these two classes, as already
menti nod bef re In this way the oeculiar result arises that
the t tal inc me distributi n is much ra^re unequal than
almost all the conditional inc me distributions.
This in a way also answers the quest! n which
might well be aakeds ;hy the pattern of inc me diotributi n
c>uld not be derived fr m the conditional distributions
without reference to the wealth distribution.
Allometric growth of income and wealth
The discussion of the relatione of income and wealth will
now be extended t take accoun^of influences in both direc i&ns.
The starting point will be the regression of income
on wealth which seems to be linear as far as the data go.
This might be regarded as a case of allnmetry, in anal gy to
a ''law” well known to biologists 1 t Various parts of an organism
grow at different but constant rates and as a result the pr portion
of their sizes ( on log scale ) remain constant in the growing body.
1 ) Ludwig v -n -^ortalanffy, feneral System The >ry Penguin 19^8 p.63
Devendra Sahal has used the aTT~metric law in combination with
the progress funoti>n in order t- explain the Paret distributi) n
( in ne dime .si n ); see A F naulati n f the Paret' Distributi n.
US.!, Science ^ontre, 10 0 Berlin 33( mime > ). ■Ala-*- Although the
use I am trying to male f the law is different I owe t
Devendra Sah.nl 1o have my attention drawn to it.