economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

, distribution is the way total

output Output may refer to: * The information produced by a computer, see Input/output * An output state of a system, see state (computer science) * Output (economics), the amount of goods and services produced ** Gross output in economics, the value o ...

, income, or

wealth Wealth is the abundance of Value (economics), valuable financial assets or property, physical possessions which can be converted into a form that can be used for financial transaction, transactions. This includes the core meaning as held in the ...

is distributed among individuals or among the

factors of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the rel ...

(such as

labour Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the labour ...

land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of the planet Earth that is not submerged by the ocean or other bodies of water. It makes up 29% of Earth's surface and includes the continents and various islan ...

, and capital). In general theory and in for example the U.S.

National Income and Product Accounts The national income and product accounts (NIPA) are part of the national accounts of the United States. They are produced by the Bureau of Economic Analysis of the Department of Commerce. They are one of the main sources of data on general econ ...

, each unit of output corresponds to a unit of income. One use of national accounts is for classifying factor incomes and measuring their respective shares, as in national Income. But, where focus is on income of ''persons'' or ''households'', adjustments to the national accounts or other data sources are frequently used. Here, interest is often on the fraction of

income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. For ...

going to the top (or bottom) ''x'' percent of households, the next ''x'' percent, and so forth (defined by equally spaced cut points, say

quintiles IQVIA, formerly Quintiles and IMS Health, Inc., is an American multinational company serving the combined industries of health information technology and clinical research. IQVIA is a provider of biopharmaceutical development and commercial outs ...

), and on the factors that might affect them (globalization, tax policy, technology, etc.).

Descriptive, theoretical, scientific, and welfare uses

Income distribution In economics, income distribution covers how a country's total GDP is distributed amongst its population. Economic theory and economic policy have long seen income and its distribution as a central concern. Unequal distribution of income causes ec ...

can describe a prospectively observable element of an economy. 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 Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. Attempting to apply the principles of welfare economics gives rise to the field of public ec ...

, a level of ''feasible'' output

possibilities ''Possibilities'' is the forty-fifth studio album by American jazz pianist Herbie Hancock, released on August 30, 2005, by Hear Music and Vector Recordings. Background The album features a variety of guest musicians such as Trey Anastasio, Jo ...

is commonly distinguished from the distribution of income for those output possibilities. But in the formal theory of ''social'' welfare,

rules Rule or ruling may refer to: Education * Royal University of Law and Economics (RULE), a university in Cambodia Human activity * The exercise of political or personal control by someone with authority or power * Business rule, a rule pert ...

for selection from feasible distributions of income and output are a way of representing

normative economics Normative economics (as opposed to positive economics) is the part of economics that deals with normative statements. It focuses on the idea of fairness and what the outcome of the economy or goals of public policy ''ought to be''. Paul A. Samuel ...

at a high level of generality.

Neoclassical distribution theory

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...

, the supply and demand of each factor of production interact in factor markets to determine equilibrium output, income, and the income distribution. Factor demand in turn incorporates the marginal-productivity relationship of that factor in the output market. Analysis applies to not only capital and land but the distribution of income in labor markets. The

neoclassical growth model Neoclassical or neo-classical may refer to: * Neoclassicism or New Classicism, any of a number of movements in the fine arts, literature, theatre, music, language, and architecture beginning in the 17th century ** Neoclassical architecture, an ar ...

provides an account of how the distribution of income between capital and labor is determined in competitive markets at the

macroeconomic Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and ...

level over time with

technological change Technological change (TC) or technological development is the overall process of invention, innovation and diffusion of technology or processes.From ''The New Palgrave Dictionary otechnical change by S. Metcalfe. •biased and biased techno ...

and changes in the size of the capital stock and labor force. F.H. Hahn (2008). "neoclassical growth theory," '' The New Palgrave: A Dictionary of Economics''
Abstract.
/ref> More recent developments of the distinction between human capital and

physical capital Physical capital represents in economics one of the three primary factors of production. Physical capital is the apparatus used to produce a good and services. Physical capital represents the tangible man-made goods that help and support the produ ...

and between

social capital Social capital is "the networks of relationships among people who live and work in a particular society, enabling that society to function effectively". It involves the effective functioning of social groups through interpersonal relationships ...

and personal capital have deepened analysis of distribution.

Statistics

Vilfredo Pareto Vilfredo Federico Damaso Pareto ( , , , ; born Wilfried Fritz Pareto; 15 July 1848 – 19 August 1923) was an Italians, Italian polymath (civil engineer, sociologist, economist, political scientist, and philosopher). He made several important ...

proposed the distribution of income can be described by a power-law: this is now called the Pareto distribution.

Notes

References

* A.B. Atkinson and F. Bourguignon, ed. (2000). ''Handbook of Income Distribution'', v. 1. Elsevier. Description & chapter-previe
links.
* _____ (2001). "Income Distribution," ''

International Encyclopedia of the Social & Behavioral Sciences The ''International Encyclopedia of the Social & Behavioral Sciences'', originally edited by Neil J. Smelser and Paul B. Baltes, is a 26-volume work published by Elsevier. It has some 4,000 signed articles (commissioned by around 50 subject edit ...

'', pp. 7265–71
Abstract.
*
(UCP descr)
*
(UCP descr)
* Harry Brighouse and Adam Swift (2008). "egalitarianism." ''

The New Palgrave Dictionary of Economics ''The New Palgrave Dictionary of Economics'' (2018), 3rd ed., is a twenty-volume reference work on economics published by Palgrave Macmillan. It contains around 3,000 entries, including many classic essays from the original Inglis Palgrave Diction ...

''. 2nd Edition
Abstract.
* Sheldon Danziger and Peter Gottschalk (1995). ''America Unequal'', Harvard University Press, Cambridge, MA
(book abstract)
* Sheldon Danziger, Robert Haveman, Robert Plotnick (1981). "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," ''Journal of Economic Literature'' 19(3),
pp. 975–1028
*

Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...

and Simon Kuznets (1945). ''Income from Independent Professional Practice''

NBER The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic c ...

. * Julian Lamont (2003)
"Distributive Justice"
''Stanford Encyclopedia of Philosophy''. * Gian Singh Sahota (1978). "Theories of Personal Income Distribution: A Survey", ''Journal of Economic Literature'', 16(1),
pp. 1–55
* Xavier Sala-Martin (2006
"The World Distribution of Income: Falling Poverty and… Convergence, Period,"
+ button to enlarge), ''Quarterly Journal of Economics," 121(2), May, pp. 351–97. *

Paul A. Samuelson Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "h ...

and

William D. Nordhaus William Dawbney Nordhaus (born May 31, 1941) is an American economist, a Sterling Professor of Economics at Yale University, best known for his work in economic modeling and climate change, and one of the 2 recipients of the 2018 Nobel Memoria ...

(2004). ''

Economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

'', 18th ed., :ch. 12: How Markets Determine Incomes :ch. 13: The Labor Market :ch. 14: Land and Capital :ch. 14: Appendix Markets and Economic Efficiency . * U.S. Census Bureau (

999 999 or triple nine most often refers to: * 999 (emergency telephone number), a telephone number for the emergency services in several countries * 999 (number), an integer * AD 999, a year * 999 BC, a year Books * ''999'' (anthology) or ''999: T ...

2004)
"Income Inequality (1947–1998)."
Some ''distribution'' entries from '' The New Palgrave: A Dictionary of Economics'' (1987): * "distribution, law of," v. 1, pp. 869–72, by J.B. Clark

926 Year 926 ( CMXXVI) was a common year starting on Sunday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – The Italian nobles turn against King Rudolph II of Burgundy and request that ...

* "distribution theories, classical," v. 1, pp. 872–76, by Luigi Pasinetti. * "distribution theories, Keynesian," v. 1, pp. 876–78, by

Mauro Baranzini Mauro Leo Baranzini (born 31 August 1944 in Bellinzona, Switzerland) is a Switzerland, Swiss economist of the Cambridge Post-Keynesian economics, Post-Keynesian school of thought. He was a student of Bruno Caizzi at the ''Scuola Superiore di Com ...

. * "distribution theories, Marxian," v. 1, pp. 878–83, by David M. Gordon. * "distribution theories, neoclassical," v. 1, pp. 883–86, by Christopher Bliss. * "distributive justice," v. 1, pp. 886–88, by Edmund S. Phelps. * "imputation," v. 2, pp. 838–39, by Murray N. Rothbard. * "inequality between persons," v. 2, pp. 821-24, by Anthony F. Shorrocks. * "interest and profit," v. 2, pp. 877–79, by Carlo Panico. * "marginal productivity theory," v. 3, pp. 323–25, by Robert F. Dorfman. * "Marxian value analysis," v. 3, pp. 383–87 by J.E. Roemer. * "profit and profit theory," v. 3, pp. 1014–21, by

Meghnad Desai Meghnad Jagdishchandra Desai, Baron Desai (born 10 July 1940) is a India-born naturalised British economist and former Labour politician. He stood unsuccessfully for the position of Lord Speaker in the House of Lords in 2011. He has been a ...

. * "wages, real and money," v. 4, pp. 840–42, by Henry Phelps Brown. Some ''distribution'' entries from ''

'' (2008), 2nd Ed.: * "classical distribution theories" by Massimo Pivetti
Abstract.
* "convergence" by

Steven N. Durlauf Steven Neil Durlauf (born August 12, 1958) is an American social scientist and economist. He is currently Steans Professor in Educational Policy at the Harris School of Public Policy Studies at the University of Chicago The University of Chi ...

and Paul A. Johnson
Abstract.
* "equality of opportunity" by J.E. Roemer
Abstract.
* "income taxation and optimal policies" by Louis Kaplow
Abstract.
* "national income" by Thomas K. Rymes
Abstract.
* "skill-biased technical change" by Giovanni L. Violante
Abstract.
* "wage inequality, changes in" by

Stephen Machin Stephen Jonathan Machin (born 23 December 1962) is a British economist and professor of economics at the London School of Economics (LSE). Moreover, he is currently director of the Centre for Economic Performance (CEP) and is a fellow of the Britis ...

and John Van Reenen.
Abstract.
* "women's work and wages" by Francine D. Blau and Lawrence M. Kahn
Abstract.

External links

U.S. National income by type of income, 1959–2005
from 2006

Economic Report of the President The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the President of the United States on economic policy. The CEA provides much of the empirical resea ...

via Federal Reserve Bank of St. Louis. {{Authority control Distribution of wealth

Descriptive, theoretical, scientific, and welfare uses

Neoclassical distribution theory

Statistics

See also

Distribution of what?

Distribution theories

Classical distribution theory

Marxian distribution theory

Neoclassical distribution theory

Normative economics of distribution

Notes

References

External links