The Determinants Of Interstate Variations In Income Distribution

Datos Bibliográficos

ID9256482
AutoresDavid Ruthenberg (Kansas State University), Miron Stano (0000-0002-0720-6605, b Wayne State University)
Año1977
Volumen35
Número1
Páginas55-66
Fecha de publicación1977-04-01
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaReview of Social Economy (JOURNAL)
Identificadores de la revistaISSN: 0034-6764 • E-ISSN: 1470-1162
EditorialInforma UK Limited (PUBLISHER • GB)
DOI10.1080/00346767700000005
OpenAlexW2091825527
IdiomaEN
Citas recibidas8
Referencias citadas12

Several contributions (e.g., Al-Samarrie and Miller, Aigner and Heins, and Jonish and Kau) have attempted to explain interstate variations in the Lorenz-Gini coefficient by means of the Kuznets [1955, 1963] hypothesis. In his model, Kuznets examined the rela? tionship between income concentration and economic development. He suggested that, during the first stage of development (a period of approximately 50 years), the shift away from agriculture and the in? creasing concentration of wealth in higher income groups tend to increase income inequality. However, Kuznets predicted that as econ? omies mature, social and political factors will emerge to improve the relative status of lower income groups. Empirical tests for the U.S. have been concerned with this latter phase of the development process. The typical procedure has been to estimate, with ordinary least squares, a single equation model of the determinants of the Lorenz Gini index of inequality. Among the regressors are mean family in? come, used as a proxy for economic development, and several va? riables designed to incorporate factors closely associated with the work of Kravis. The usual finding of a significant negative coefficient for mean family income has been interpreted as a confirmation of the Kuznets theory. The purpose of this paper is twofold. First, we show that the single equation model used in these recent studies may contain a specifica? tion error. We suggest that the essence of the Kuznets-Kravis sketch of the process by which development reduces income inequality is better represented by a simple multi-equation system. Within this context, the type of equation which has been estimated elsewhere may be neither a structural equation of the model nor a reduced form

Distribution (mathematics) · Econometrics · Economic inequality · Economics · Gini coefficient · Income distribution · Income inequality metrics · Inequality · Kuznets Curve · Lorenz curve · Ordinary least squares · Proxy (statistics) · Statistics · Economic theories and models · Economic Theory and Policy · Income, Poverty, and Inequality · Mathematics