Full text: The Personal Distribution of Income

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

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