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Statics and Dynamics of Income Distribution: An Introductory Survey

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  • John Creedy

Abstract

This article discusses some of the issues involved in making comparisons of income distributions using cross‐sectional data and in examining the dynamics of income distribution using longitudinal data. Any study of income distribution must consider the unit of analysis, the time period and the measure of income, and these are the focus of the article. Section 2, on annual incomes, begins with problems of intra‐household income sharing and the measure of income used, including household production. Comparisons among households of different size are discussed, involving the choice of equivalence scales, the use of decomposition analysis and more general dominance conditions. The role of value judgments in the use of equivalence scales is stressed. Section 3 is concerned with dynamic aspects of income distribution. It discusses methods of constructing synthetic cohorts for use in simulation exercises, the varieties of longitudinal data available, sample attrition and the unit of analysis. An appendix provides further references to the literature and data sources.

Suggested Citation

  • John Creedy, 1994. "Statics and Dynamics of Income Distribution: An Introductory Survey," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 27(4), pages 51-71, October.
    • Handle: RePEc:bla:ausecr:v:27:y:1994:i:4:p:51-71
    DOI: 10.1111/j.1467-8462.1994.tb00860.x
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    References listed on IDEAS

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    1. Lazear, Edward P. & Michael, Robert T., 1988. "Allocation of Income within the Household," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226469669, August.
    2. Anders Björklund, 1993. "A Comparison Between Actual Distributions Of Annual And Lifetime Income: Sweden 1951–89," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 377-386, December.
    3. Frank A. Hanna & Joseph A. Pechman & Sidney M. Lerner, 1948. "Foreword, Analysis of Wisconsin Income," NBER Chapters, in: Analysis of Wisconsin Income (Studies in Income and Wealth, vol. 9), pages 1-16, National Bureau of Economic Research, Inc.
    4. Frank A. Hanna & Joseph A. Pechman & Sidney M. Lerner, 1948. "Analysis of Wisconsin Income (Studies in Income and Wealth, vol. 9)," NBER Books, National Bureau of Economic Research, Inc, number hann48-1, February.
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    Cited by:

    1. Daina McDonald, 2006. "150 Issues of The Australian Economic Review: The Changing Face of a Journal over Time," Melbourne Institute Working Paper Series wp2006n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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