NI an article published in this REVIEW,2 Mr. Edward Ames has discussed a method of adjusting the income distribution of families, or other income receiving units, for changes in average income. The essence of Mr. Ames' method is the assumption that the inequalities of the income distribution will not be affected by changes in average income. More technically speaking, the Lorenz curve, which relates the cumulated percentage of families to the cumulated percentage of income received, is assumed to remain unchanged. For example, if with an average income of $I500 the lowest I7 per cent of all families receive only 312 per cent of the total national income (see Table i), then with an average of $2000 the lowest I7 per cent must still receive only 3 Y2 per cent of the income. Mr. Ames derived his method from considerations involving the Lorenz curve, but he could have put up a better theoretical discussion and obtained the same practical results without once mentioning the Lorenz curve. While Mtr. Ames' method is perfectly sound aside from the unrealistic assumptions upon which it is based -it appears to be unduly complex in theory and to require an unnecessary amount of statistical manipulation in practice. This paper presents an alternative method of adjusting an income distribution, which is fundamentally the same as that of Mr. Ames, but which is believed to be both easier to understand and much more economical to operate. If we have a distribution of families by income, and if we wish to estimate how those families will be distributed after an increase of, say, 33 per cent in the average income, we must make certain assumptions about the way in which that increase will affect families at different income levels. One possible though unrealistic assumption, which will permit an easy solution, is that all families on the average enjoy the same percentage increase, that is 33 per cent. This does not necessarily mean that the income of each family will increase exactly 33 per cent; it merely means that the high income families will not receive a greater average percentage increase than the low income families, or vice versa. For the sake of simplifying the discussion, however, we shall pretend that each family does receive an increase of exactly 33 per cent; and we shall give a more rigorous analysis in a mathematical note, following the discussion. necessary result of the assumption of a constant percentage increase for all families is that the inequalities of the income distribution, and hence the Lorenz curve, will remain unchanged. The income of every family can be doubled or halved, increased by 33 per cent or decreased by I5 per cent, without affecting the inequality of the distribution; the lower I7 per cent of families will still receive only 312 per cent of the income. But all this is incidental. The fundamental statistical problem is the adjustment of the frequency distribution so that each family will receive a 33 per cent increase. The simplest method of adjusting an income distribution is by graphic computation from a cumulative frequency curve. There are literally dozens of practical variations by which this method can be employed, but all of them are fundamentally the same. Here we shall illustrate one of t7he variations which appears to be particularly simple and straightforward. Table i presents the National Resources Committee estimate of the distribution of income in the United States for I935-36; column 2 contains the cum lative percentages of families by income level (the distribution used by Mr. Ames in his example), and column 3, the cumulative percentages of income received. These distributions are characterized by an average family income of $I502, or a national income of about 6o billion dollars divided among 39 2million families. The problem at hand is to estimate a new pair of distributions 1 The author is now serving as a Lieutenant with the United States Naval Reserve. The opinions contained in this article are the writer's own, and they are not to be construed as official or as reflecting the viewvs of the Navy Department or the naval service at large. ' Edward Ames, A Method for Estimating the Size Distribution of a Given Aggregate Income, this REVIEW, XXIV (I942), Pp. I84-89.