21
Outlook on further developments.
In this paper the idea has been elaborated that the amount
of wealth determines the chances of having certain amounts
of income.But it may be thought that also the inverse
relation - influence of income on wealth - plays a role.
Certainly the increment of wealth per year depends on
income,given the rate of saving out of various incomes. If
we take into account that the present income is usually
strongly correlated with the past incomes of the same
person,or even of his ancestors, then it appears that the
chances of a certain wealth may be determined,indirectly,
by the present income.And we may connect this relation
with the regression line of wealth on income (which in the
Swedish data appears so very distorted on account of the
truncation of the distribution). There are,then, two
theories ,and two regression lines. It would be very
convenient if we could regard each of the regression lines
as a true picture of the corresponding theory. This
correspondence is,however,marred by the greater or lesser
dispersion of values round each of the regression lines.
It can easily be seen that the dispersion round one of the
regression lines will influence the shape of the other
regression line. If the rate of return of a given wealth
is widely dispersed then the persons with a high rate of