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It has been used as an input for testing theories explaining the distribution of income, for example human capital theory and the theory of economic discrimination (Becker, 1993, 1971). In welfare economics , a level of feasible output possibilities is commonly distinguished from the distribution of income for those output possibilities.
Income distribution has always been a central concern of economic theory and economic policy. Classical economists such as Adam Smith, Thomas Malthus and David Ricardo were mainly concerned with factor income distribution, that is, the distribution of income between the main factors of production, land, labour and capital.
In economics, income distribution covers how a country's total GDP is distributed amongst its population. [1] Economic theory and economic policy have long seen income and its distribution as a central concern. Unequal distribution of income causes economic inequality which is a concern in almost all countries around the world. [2] [3]
A practical example of a Lorenz curve: the Lorenz curves of Denmark, Hungary, and Namibia. A Lorenz curve always starts at (0,0) and ends at (1,1). The Lorenz curve is not defined if the mean of the probability distribution is zero or infinite. The Lorenz curve for a probability distribution is a continuous function. However, Lorenz curves ...
The only income distribution that is not permissible is a uniform one where all individuals have the same income and therefore, since they have the same preferences, they are all identical. [ 17 ] For a while it was unclear whether SMD-style results also applied to the market demand curve itself, and not just the excess demand curve.
The Atkinson index is defined as: (, …,) = {(=) / (=) / = (,...,) = +where is individual income (i = 1, 2, ..., N) and is the mean income.. In other words, the Atkinson index is the complement to 1 of the ratio of the Hölder generalized mean of exponent 1−ε to the arithmetic mean of the incomes (where as usual the generalized mean of exponent 0 is interpreted as the geometric mean).
Income distribution is included in the JEL classification codes as JEL: D31 Wikimedia Commons has media related to Income distribution . The main article for this category is Income distribution .
These numbers compare very unfavourably with, for example, the United States. When using transition tables findings, an economic mobility in these countries is characterized by high persistence at the top of the income distribution, but more mobility for middle and lower classes, which was noted by Torche (2014). [16]