## Full text: The Personal Distribution of Income

this approach, size distribution is a transformed age
distribution, and the pattern of the Pareto law appears*
so often simply because of the empirical importance of
exponential growth which makes both the age distribution
and the tranformation function exponential. Owing to the
conceptual . density of Champernowne's model the two
elements of life- cycle and promotion are merged into
one.
(which resides
There is, however, a differsnce/\in the interpretation not
in the form)between Champernowne's model and the others:
Since physical persons sooner or later die, the age in
his model is limited, while in the others (relating to
firms or wealth) there is always the probability of
virtually infinite life which accounts for a very
2.2.
peculiar character of the steady states concerned £yg J.
Further developments
/
x /
We may consider the following stages in the treatment of
the income distribution;
I.
U.
III.
Champernowne's model
t
Rutherford's model 3e treated persons'life
times explicitly.
The above models are open to criticism on two grounds:
First, income is not very suitable as a state variable
for a Harkov process. It does not embody the "influence
\
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