Wednesday, August 06, 2008

Help Me Pick a New Name for "Income Distribution"

I've been trying to think of a way to accurately refer to the income distribution without using the word "distribution." When economists think of income distribution, they are thinking about statistics and pdfs. I believe when others hear of it, the statistical noun "distribution" is transformed in their mind to the verb "distribute" (as in "we shall distribute the income accordingly") or perhaps the adjective "distributed" (as in "the income was distributed in this fashion"). Since income and wealth are created, not distributed, how can I rephrase income distribution into something that is accurate and remains accurate in the mind of the listener? My own ideas are too long, bulky, and academicy, like "...the proportionality of income creation...".

Any suggestions would be a public good.


Thomas said...

Income contribution? A chart of incomes vs probabilities could be an 'income contribution map', or for policy work you could chart incomes vs physical locations as a real income contribution map.

But isn't income both created and distributed? Firms aggregate individual efforts to create wealth and income, but the wealth and income created may or may not be distributed proportionally to the individual income contributors.

Justin M Ross said...

I kind of like Income contribution, and when stated that way it almost changes the way you would view the problem in that it would realign the true problem in income inequality, which is that some people have low incomes.

Total income can only be created, but you can have an individuals income transferred from one person to another via welfare or social security. Within firms, competitive labor and producer markets wages and rent are pushed to their individual income contribution (better known as marginal revenue product). However, it is my understanding that to the extent we can measure this, very large corporations appear to overpay those at the bottom and underpay those towards the top. Frank has an explanation for this in his book "Economic Naturalist" you can check out next time you are in Barnes and Noble, but I don't think it is very convincing.