Full text: The Personal Distribution of Income

line to it. But any attempt to illustrate an abstract 
argument by concrete data is better than speculating in 
the void. 
The most impressive feature of the data is the linear and 
very regular character of the regression of income on 
wealth. The regression coefficient is in most cases around 
2/3 but it may be as low as 1/2. A considerable defect of 
the data is the unequal size of the wealth (as well as the 
income ) classes. The range of the classes increases with 
the wealth.The last but one wealth class has a range about 
four times as great as the lower wealth classes. This 
makes it very difficult to decide whether the variance and 
higher moments of income are independent of the size of 
wealth. In the Swedish data the variance increases in the 
higher wealth classes. This may,however, be plausibly 
explained by the increase in the range of these classes. 
The same defect mars the comparison of the conditional 
distributions of income in the various wealth classes. 
They all have a Pareto tail,but the Pareto coefficient is 
markedly lower in the last two or three wealth classes 
than in the others.This,again,may be plausibly explained 
by the greater range of these high wealth size classes.

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