Modeling Income Distributions and Lorenz Curves


Book Description

Jean-Jacques Rousseau wrote in the Preface to his famous Discourse on Inequality that “I consider the subject of the following discourse as one of the most interesting questions philosophy can propose, and unhappily for us, one of the most thorny that philosophers can have to solve. For how shall we know the source of inequality between men, if we do not begin by knowing mankind?” (Rousseau, 1754). This citation of Rousseau appears in an article in Spanish where Dagum (2001), in the memory of whom this book is published, also cites Socrates who said that the only useful knowledge is that which makes us better and Seneca who wrote that knowing what a straight line is, is not important if we do not know what rectitude is. These references are indeed a good illustration of Dagum’s vast knowledge, which was clearly not limited to the ?eld of Economics. For Camilo the ?rst part of Rousseau’s citation certainly justi?ed his interest in the ?eld of inequality which was at the centre of his scienti?c preoccupations. It should however be stressed that for Camilo the second part of the citation represented a “solid argument in favor of giving macroeconomic foundations to microeconomic behavior” (Dagum, 2001). More precisely, “individualism and methodological holism complete each other in contributing to the explanation of individual and social behavior” (Dagum, 2001).




The Personal Distribution of Income in an International Perspective


Book Description

Irene Becker and Richard Hauser "Bringing Income Distribution in From The Cold" was the title Anthony B. Atkinson gave his Presidential Address to the Royal Economic Society in 1996. This provocative formulation was intended to draw attention to the way in which the subject of income distribution long has been marginalised in the field of economics (Atkinson 1997). In recent years, however, scientific interest in matters of personal income distribution has been growing. One reason for this recent concern stems from the political sphere: The factors of reinforced competition between countries due to the globalisation of markets and European integration, high unemployment rates and demographic changes necessitate reforms of labour markets, tax systems and social security systems. These reforms will affect both allocation and distribution, so that reliable information on both areas is needed to devise balanced political programs. Another reason for the burgeoning literature on personal income distribution is the improved availability of data on individual income, which are a major prerequisite for detailed analyses of distribution topics. Last but not least, the development of powerful computers, advanced statistics, econometric packages and extended micro-simulation models enables researchers both to work with huge individual data sets to describe and explain the personal distribution of income and to simulate the effects of political (social and economic) programs. The volume at hand is based on some of the research advances in this field during the last decade.







Economic Inequality and Income Distribution


Book Description

Economic inequality has become a focus of prime interest for economic analysts and policy makers. This book provides an integrated approach to the topics of inequality and personal income distribution. It covers the practical and theoretical bases for inequality analysis, applications to real world problems and the foundations of theoretical approaches to income distribution. It also analyses models of the distribution of labour earnings and of income from wealth. The long-run development of income - and wealth - distribution over many generations is also examined. Special attention is given to an assessment of the merits and weaknesses of standard economic models, to illustrating the implications of distributional mechanisms using real data and illustrative examples, and to providing graphical interpretation of formal arguments. Examples are drawn from US, UK and international sources.







Econophysics of Wealth Distributions


Book Description

We all know the hard fact: neither wealth nor income is ever uniform for us all. Justified or not, they are unevenly distributed; few are rich and many are poor! Investigations for more than hundred years and the recent availability of the income distribution data in the internet (made available by the finance ministries of various countries; from the tax return data of the income tax departments) have revealed some remarkable features. Irrespective of many differences in culture, history, language and, to some extent, the economic policies followed in different countries, the income distribution is seen to fol low a particular universal pattern. So does the wealth distribution. Barring an initial rise in population with income (or wealth; for the destitutes), the population decreases either exponentially or in a log-normal way for the ma jority of 'middle income' group, and it eventually decreases following a power law (Pareto law, following Vilfredo Pareto's observation in 1896) for the rich est 5-10 % of the population! This seems to be an universal feature - valid for most of the countries and civilizations; may be in ancient Egypt as well! Econophysicists tried to view this as a natural law for a statistical ma- body-dynamical market system, analogous to gases, liquids or solids: classical or quantum.




Wage-Led Growth


Book Description

This volume seeks to go beyond the microeconomic view of wages as a cost having negative consequences on a given firm, to consider the positive macroeconomic dynamics associated with wages as a major component of aggregate demand.




Income Distribution Dynamics of Economic Systems


Book Description

Econophysics has been used to study a range of economic and financial systems. This book uses the econophysical perspective to focus on the income distributive dynamics of economic systems. It focuses on the empirical characterization and dynamics of income distribution and its related quantities from the epistemological and practical perspectives of contemporary physics. Several income distribution functions are presented which fit income data and results obtained by statistical physicists on the income distribution problem. The book discusses two separate research traditions: the statistical physics approach, and the approach based on non-linear trade cycle models of macroeconomic dynamics. Several models of distributive dynamics based on the latter approach are presented, connecting the studies by physicists on distributive dynamics with the recent literature by economists on income inequality. As econophysics is such an interdisciplinary field, this book will be of interest to physicists, economists, statisticians and applied mathematicians.




Theories of Income Distribution


Book Description

This book brings together the work of scholars who have written for it independent essays in their areas of particular expertise in the general field of income distribution. The first eight chapters provide a review of the major theories of income distribution, while the final two are con cerned with problems of empirical estimates and inferences. One of these chapters presents estimates of factor shares in national income in the United States, the United Kingdom and Canada, while the other ex amines how relationships between the size distribution of income and economic development are being investigated. A convenient way of conveying an understanding of how economic theorists have dealt with the distribution of income is to examine separ ately each major approach to this subject. Each contributor was thus assigned a particular approach, or a major theorist. No attempt was made to avoid the apparent duplication that occurs when the same references are examined by different contributors. The reader gains by seeing how the same material can be treated by those looking at it from different perspectives. A chapter each has been devoted to Marx and Marshall.