Analysis Of Income Distribution Research Articles

From Chicago to L.A. and Back Again: A Chicago-Inspired Quantitative Analysis of Income Distribution in Montreal*

In a recent issue of Urban Geography (2001), a number of key players in the 1960s and 1970s school of quantitative urban geography (called Chicago II in this article) set out some of the approach's key methodological premises and assessed its influence in the wider arena of urban studies. At about the same time, the 1920s and 1930s Chicago School of urban sociology (called the Chicago School in this article) was being reassessed in France (Huet 2000), and deconstructed in Los Angeles (Dear 2001). In this article, we outline a selection of basic models of urban space proposed by the Chicago School and further elaborated by Chicago II. We then consider certain aspects of three important critiques: humanist/aesthetic, Marxist, and postmodern. We argue that none of these invalidates the Chicago II approach to the study of urban areas, and we demonstrate its resilience and usefulness by way of the empirical example of Montreal. Though the results are of interest in their own right, the principal purpose of the analysis is to illustrate the type of insight that a structured quantitative approach provides and the way this approach rests on a theoretical understanding of processes at work in cities. We conclude by arguing that the humanist and Marxist critiques shed important light upon the possibilities and limits of the Chicago II approach, but that the postmodern claim that the spatial development of urban areas is not structured by at least some general processes is inaccurate.

Regional Income Inequality in Selected Large Countries

Income inequality can be measured at different levels of aggregation such as global, continental, international and national levels. Here we consider income inequality at the national level but the focus is on the within country regional inequality. Regional inequality in income distribution in a selection of large countries measured by the size of their population and land area with regional, provincial or federation division is examined. The empirical results reported are based on the second half of the 20th century. The countries considered here cover large transition, developing and industrialised countries. The review cover a whole range of measures and methods frequently employed in empirical analysis of income inequality and income distribution. Different determinant factors and their impacts from different studies are presented. Empirical results from the literature is compared with those obtained based on the WIID data covering post 1950.

DAD, an Innovative Tool for Income Distribution Analysis

Numerous theoretical and empirical studies have examined the economics of income distribution and redistribution. Kolm [5] and Atkinson’s [1] original papers initiated extensive theoretical discussions on techniques to measure income inequality. Lambert’s [6] milestone book completely reviewed the theoretical basis underlying income distribution and related issues including redistribution, social welfare, and poverty. With the development of theory in income distribution, economists are eager to apply the theory to empirical problems in welfare economics, labor economics, and development economics [2]. Income related data become the key component of all empirical analysis. How to analyze the income data correctly and efficiently is the challenge to every researcher in this field. Hardware seems no longer to be a problem after the information technology advance from the outdated IBM mainframes to personal computers that are much faster and smaller nowadays. However, there is no single dominant software for income distribution analysis. Popular statistical packages, like SAS, Stata, and GAUSS, were not developed specifically for economists who are interested in income inequality, redistribution and social welfare. These software packages do not provide the most effective way to analyze income data for the following reasons:

Inequalities in Income Distribution in Slovenia

This article presents an empirical analysis of income distribution based on income tax data for Slovenia in 1991-2000. It presents evidence of rising inequalities in income distribution (gross income, gross wages and pensions). These results are supported by coefficients of variation, Gini coefficients and by the Lorenz curves. Inequalities increased rapidly in the 1991 to 1993 period. After a significant decrease in 1994 and a steady increase from 1995 to 2000, the peak value from 1993 was not surpassed. Atkinson's requirements for dominance comparisons are not violated. Inequalities are also present in the distribution of the benefits of economic growth among income groups.

A model of trickle-down through learning

This paper presents an analysis of income distribution based on an overlapping generations model of imperfect capital markets, technological non-convexities and information acquisition. Heterogeneous, altruistic agents apply for loans from financial intermediaries to undertake risky investment projects. Borrowing is prohibited below a critical level of wealth that depends on agents’ evaluation of risk which is updated over time according to the arrival of new information. This process of learning governs the transition of lineage wealth and, with it, the dynamics of income distribution. In general, limiting outcomes depend on initial conditions that determine the extent to which class divisions persist in multiple steady state equilibria. Such divisions may vanish if the initial distribution satisfies certain criteria.

Weintraub's consumption coefficient

The author contends that Weintraub's consumption coefficient, the ratio of total consumer expenditure to income from employment, cannot help to elucidate trends in the sectoral and functional distributions of income. Nor can it enhance the Kalecki's macroeconomic model. It cannot do either of these things because it is distribution determined, not distribution determining. Further, it is argued that the use of Weintraub's consumption coefficient distracts us from basing our analysis of income distribution on business mark‐ups, which lie at the core of the Kaleckian research program.

Searching for prosperity

Abstract Quah's [1993a] transition matrix analysis of world income distribution based on annual data suggests an ergodic distribution with twin peaks at the rich and poor end of the distribution. Since the ergodic distribution is a highly non-linear function of the underlying transition matrix, it is estimated extremely noisily. Estimates over the foreseeable future are more precise. However, the Markovian assumptions underlying the analysis are much better satisfied with an analysis based on five-year transitions than one-year transitions. Such an analysis yields an ergodic distribution with 72% of mass in the top income category, but a prolonged transition, during which some inequality measures increase. The rosy ergodic forecast and prolonged transition arise because countries' relative incomes move both up and down at moderate levels, but once countries reach the highest income category, they rarely leave it. This is consistent with a model in which countries search among policies until they reach an income level at which further experimentation is too costly. If countries can learn from each other's experience, the future may be much brighter than would be predicted based on projecting forward the historical transition matrix.

Assessing the impact of food policy research: rice trade policies in Viet Nam

The economic impact of marketing and trade policy research in Viet Nam conducted by the International Food Policy Research Institute (IFPRI) is assessed using a novel benefit–cost framework. It measures the economic value of the time saved in hastening the policy responses of the Government of Vietnam. Extensive interviews with partners and stakeholders in the research clearly indicated that the time saving was a legitimate measure of the influence of IFPRI on decision-making. Linking a spatial equilibrium model with income distribution analysis based on national household surveys, allowed IFPRI to satisfy policymakers that relaxing rice export quotas and internal trade restrictions on rice would not adversely impact on regional disparities and food security, and would have beneficial effects on farm prices and poverty. These were major concerns of policymakers prior to the IFPRI research project. The research on these and other policy options gave a degree of confidence to policymakers that relaxing the controls would be in Viet Nam’s national interest. They made these decisions earlier than would have been the case without the IFPRI research. The policy assessment framework is used to measure the economic impact of the policy changes themselves, and in particular, the contribution of IFPRI’s work with Viet Nam on the policies from 1995 to 1997. The relaxation of rice export quotas and internal restrictions on rice trade made by the Government of Viet Nam in 1995–97 are estimated to have had a present (1995) value to Viet Nam using a 5% discount rate of $222 million by 2000, rising to $966 million by 2020. For an incremental research investment of less than US$1 million, a conservative estimate of the benefit to Viet Nam of the IFPRI contribution to the policy changes effected in Viet Nam from the reduction in the policy implementation lag indicates a present value in 1995 terms of US$45 million. This represents a benefit–cost ratio of 56. A more optimistic assessment is that the present value is US$91 million with a benefit–cost ratio of 114. In addition to the welfare gains to Viet Nam, there were sizeable gains to the rest of the world from IFPRI’s contribution. Inclusion of these benefits increases present value and benefit–cost estimates by 34 to 84%. Around 38% of the contribution of IFPRI is estimated to have accrued to the rest of the world, as Viet Nam is now a major player in world rice trade.

REINVESTED EARNINGS IN THE NATIONAL ACCOUNTS

The paper raises three questions. Firstly, is it warranted that a significant part of primary (property) income is not shown in the national accounts as being distributed to the owners of the assets to which it accrues but ends up as capital gains in the revaluation account? Secondly, why has the SNA chosen not to record reinvested earnings of corporations as flows of property income with the exception of foreign direct investment, and thirdly why the asymmetrical recording of stock investments constituting more than 10 percent of equity capital depending on whether domestic or foreign transactions are concerned? Reinvested earnings on domestic equity investment above 10 percent of a corporation are not recorded as property income in the system. The paper looks at these three questions from the perspective of the analytical uses of national accounts. The consequences for the analysis of income distribution both between nations and within nations are examined.

Robust Methods for the Analysis of Income Distribution, Inequality and Poverty

SummaryIncome distribution embeds a large field of research subjects in economics. It is important to study how incomes are distributed among the members of a population in order for example to determine tax policies for redistribution to decrease inequality, or to implement social policies to reduce poverty. The available data come mostly from surveys (and not censuses as it is often believed) and often subject to long debates about their reliability because the sources of errors are numerous. Moreover the forms in which the data are availabe is not always as one would expect, i.e. complete and continuous (microdata) but one also can only have data in a grouped form (in income classes) and/or truncated data where a portion of the original data has been omitted from the sample or simply not recorded.Because of these data features, it is important to complement classical statistical procedures with robust ones. In tis paper such methods are presented, especially for model selection, model fitting with several types of data, inequality and poverty analysis and ordering tools. The approach is based on the Influence Function (IF) developed by Hampel (1974) and further developed by Hampel, Ronchetti, Rousseeuw & Stahel (1986). It is also shown through the analysis of real UK and Tunisian data, that robust techniques can give another picture of income distribution, inequality or poverty when compared to classical ones.

Argentina: current activities in the field of quality in health care.

at 35.8 million, and around 88.6% live in urban areas. The (i) the government or ‘public’ system is financed from per capita income is US$ 9300 and the unemployment rate general revenues and provides services at public hosis around 12.5%. pitals. These hospitals are mainly provincial or muLife expectancy at birth is 75.5 years for the period nicipal hospitals. They are free of charge although 1995–2000. The crude mortality rate for period 1990–1995 some mechanisms are underway to establish some was 7.7‰, the maternal mortality rate for 1995 was 4.4 per type of charge through direct users’ contributions or 10 000 and the infant mortality rate in the same year was social security reimbursement. However, the latest 22.2‰. The three most important causes of mortality for all figures indicate that only around 15% of the hospitals’ ages and both sexes are cardiovascular diseases, malignant operating budgets come from users’ fees. The other tumors and cerebrovascular diseases. According to the United 85% comes from general revenues. These hospitals Nations Development Program, Argentina is included in the have evident problems of quality and efficiency of group of countries with high levels of human development services; (index 0.884 in 1993), although great disparities exist between (ii) the social security system provides financing mechthe country’s different population groups. anisms for health care to around 65% of the popuThe country is divided into 23 provinces and a Federal lation, including governmental or labor union District and, according to the National Constitution, it is insurance mechanisms (around 300 institutions) and a Federal Republic with a democratic government. The the private pre-paid system (around 200 institutions); Constitution establishes that all such political–administrative (iii) The private system comprises private hospitals and units are responsible for the care and health protection of the services provided by most solo practitioners. The all members of the population. In recent years Argentina has reimbursement mechanisms applied by social security experienced a period of economic stability with an annual and pre-paid systems are oriented mainly to controlling inflation rate of 0.5% and a positive rate of economic growth. costs, making operation of the private sector very However, despite such positive macro-economic indicators, difficult. analysis of income distribution in the period 1974–1998

A Demographic Analysis of Income Distribution in Estonia

This paper identifies the head of household demographic characteristics associated with the Estonian distribution of income. Using measures of income inequality and regression analysis on 1995 household data, we examine how household income is distributed by the age, gender, race, and education level of the heads of household. The Gini coefficient estimates indicate that the household incomes associated with female and elderly heads have an equalizing effect. Households headed by younger males or those who are educated contribute to greater income disparity. The regression analysis confirms these results and suggests that social transfers for households headed by women, the disabled, and the elderly, have an equalizing effect on the income distribution. We also find that farm households appear to lag far behind their urban counterparts in earnings and income.

Estimating the exponential family using grouped data: An application to the New Zealand income distribution1

The exponential family of distributions offers considerable scope for the analysis of income distributions because of its ability to ‘nest’ many densities and the possibility of deriving special cases explicitly from labour demand and supply models. This paper presents several estimation methods based on the use of grouped data. These methods are motivated by the fact that many income distribution data are available in grouped form. The methods are applied to New Zealand income distribution data for males and females in a number of age groups. The generalised gamma distribution is found to provide the best fit to the distributions of most age groups. Three of the four parameters of the generalized gamma distribution are expressed as functions of age and conditional generalised gamma distributions are estimated using maximum likelihood, modified for grouped data. The estimated model captured the major empirical features of the changing distribution of income with age.

The distribution of income in Copenhagen at the beginning of the nineteenth century

This article presents a comprehensive analysis ofincome distribution in Copenhagen around the beginning of the nineteenth century. In contrast to earlier studies the analysis takes advantage of all the surviving records from the tax collections of 1789 and from 1810 to 1814, in sum approximately 58,000 items. The period c. 1800 constitutes an extraordinary era in Danish history, with large changes occuring in the economic situation of the country. The Danish defeat in the Napoleonic Wars and the peace conditions drawn up at Kiel proved to be the irrevocable end to the palmy days of Danish overseas trade. This study’s main objective has been to illuminate the changes in income distribution during this politically and economically turbulent period for Denmark. The records indicate a very weak trend towards an equalisation of income distribution over the period 1789 to 1814 in Copenhagen.

Changes in Regional Incomes 1986 to 1991

This paper shows the importance of occupational detail in analysis of regional income distributions in New Zealand. Changes in regional incomes are shown to be linked to two main effects, those associated with changes in the occupational and workforce structure of the population, and to changes in national patterns in occupational incomes. Once these structural features have been included, there is little scope for remaining economic effects associated with labour force participation, and other features of the labour force. These observations are consistent with a rationing model as a primary means of describing the operation of local labour markets.

Counterfactual analysis of income distribution in Brazil

RESUMO Usando uma estrutura de insumo-produto, este artigo estuda as consequências da redistribuição de renda das pessoas ricas, tanto para os pobres quanto para o governo, sobre a estrutura setorial da economia brasileira nos anos 70. Além do uso tradicional de elementos de análise setorial, o principal conceito usado para atingir esse objetivo é o de “subeconomias”, com foco nas indústrias (e nos padrões associados de emprego e valor agregado) que produzem os componentes de determinados pacotes de despesas. Assim, uma subeconomia é composta pela atividade econômica derivada de determinados grupos de gastos, como famílias pobres de consumidores, governo etc. Dois principais resultados emergem da aplicação empírica desses conceitos. Primeiro, a agricultura é o setor mais importante na geração de emprego em resposta às transferências de renda de famílias ricas para famílias pobres. Segundo, a urbanização que acompanhou o crescimento durante os anos 70 favorece uma estratégia redistributiva na qual o papel do governo se destaca em termos de geração de valor agregado e emprego.

A general equilibrium analysis of regulation and income distribution

In this paper we have utilized a two-sector, two-factor general equilibrium model of production to analyze the implications of the fair-rate of return regulation for resource allocation as well as real factor rewards. Our main conclusion is that regulation in one sector has an effect on factor rewards and resource allocation in the entire economy.

Are water rates becoming unaffordable?

The problem of affordability of drinking water is not limited to customers of small or rural water systems.National trends in water rates and income levels are examined to determine whether water rates are becoming unaffordable. A more detailed analysis of water rates and income distributions is conducted for 168 water suppliers in Pennsylvania. The author concludes that rates are increasing much more rapidly than income levels for low‐income water customers. Further, the ability of customers to afford water service appears most at risk in large water systems, even though those systems tend to be publicly owned and have lower rates than investor‐owned systems. Overall, anywhere from one in four to one in six water customers is currently paying more than 2 percent of household income for water service. Expected rate increases will place increased pressure on water utilities and all levels of government to develop policies and rate structures to ensure the continued provision of water service to low‐income households.

Drought, transfer entitlements, and income distribution: The Botswana experience

Using 1974–75 and 1985–86 income distribution survey data, with the latter supplemented by drought relief data, this paper presents an analysis of intertemporal rural household income distribution in Botswana. Despite the fact that the 1974–75 survey was conducted during one of the best agricultural production periods on record and the 1985–86 survey was conducted in the midst of one of the worst, after the rural income economy had been weakened by a severe and prolonged drought, Botswana's rural income inequality did not appear to have increased significantly. There was no marked reduction in rural household real incomes. The explanation for this outcome is found to lie in the income-maintenance strategy pursued by rural households with strong support from transfer entitlement guarantees from private and public sources supplementing rural household incomes.

New Sources and New Techniques for the Study of Secular Trends in Nutritional Status, Health, Mortality, and the Process of Aging

The aim of this paper is to describe the full dimensions of a new and rapidly growing research program that uses new data sources on food consumption, anthropometric measures, genealogies, and life-cycle histories to shed light on secular trends in nutritional status, health, mortality, and the process of aging. The exploitation of these types of data involves integration of analytical procedures in medicine and economics with those of demography. The discussion is divided into four parts. Part one deals with sources on food consumption and with methods of exploiting these sources that involve the integration of energy cost accounting with techniques for the analysis of income distributions. The second part is concerned with sources of anthropometric information and with techniques that may be utilized to relate such information to the assessment of health and mortality. Part three involves the more complex problem of relating socioeconomic and biomedical stress suffered by individuals early in life to their work levels, health and mortality rates at middle and late ages. The final section discusses the uses of genealogies by themselves and in combination with the preceding data sources.