Method in which total output and wealth are distributed in an economy
This article is about resource distribution in economic theory. For distribution of products, seeDistribution (marketing). For other uses, seeDistribution.
Ineconomics,distribution is the way totaloutput, income, orwealth is distributed among individuals or among thefactors of production (such aslabour,land, andcapital).[1] In general theory and in for example the U.S.National Income and Product Accounts, each unit of output corresponds to a unit of income. One use of national accounts is for classifying factor incomes[2] and measuring their respective shares, as innational Income. But, where focus is on income ofpersons orhouseholds, adjustments to the national accounts or other data sources are frequently used. Here, interest is often on the fraction ofincome going to the top (or bottom)x percent of households, the nextx percent, and so forth (defined by equally spaced cut points, sayquintiles), and on the factors that might affect them (globalization, tax policy, technology, etc.).
Income distribution 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 examplehuman capital theory and the theory of economic discrimination (Becker, 1993, 1971).
Inneoclassical economics, thesupply 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 themarginal productivity relationship of that factor in the output market.[5][6][7][8] Analysis applies to not only capital and land but the distribution of income in labor markets.[9]
Theneoclassical growth model provides an account of how the distribution of income between capital and labor is determined in competitive markets at themacroeconomic level over time withtechnological change and changes in the size of the capital stock and labor force.[10] More recent developments of the distinction betweenhuman capital andphysical capital and betweensocial capital and personal capital have deepened analysis of distribution.
^"Glossary "Factor income"". Bureau of Economic Analysis, U.S. Department of Commerce. 2 October 2006. Archived fromthe original on 12 June 2018. Retrieved2010-11-09.
^George J. Stigler (1941).Production and Distribution Theories: The Formative Years (analytical exposition of successive contributions by tenneoclassical economists from about 1870 to 1910). New York: Macmillan. Chapter-previewlinks.
^C.E. Ferguson (1969).The Neoclassical Theory of Production and Distribution. Cambridge.Description & reviewexcerpt.
Gary S. Becker (1993).Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education (3rd ed.). University of Chicago Press.ISBN978-0-226-04120-9.(UCP descr)
Sheldon Danziger and Peter Gottschalk (1995).America Unequal, Harvard University Press, Cambridge, MAISBN0-674-01810-9(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.
