Income inequality and poverty

THE METHODOLOGY of the size distribution of income deals with the distribution of income among individuals. Ideally, its analysis should employ both theoretical economics and statistical inference, although empirical data have been the main analytic tool in the last hundred years. Thus Professor Tinbergen's study, Income Distribution: Analy sis and Policy (1975), which provided the first thorough and sys tematic treatment of alternative theories of the size distribution of income, was most welcome. The present study could be considered a complement to his book. It deals with income distribution methods and their economic applications; appropriate techniques developed to analyze the problems of size distribution of income using actual data; and the use of these techniques in the evaluation of alternative fiscal policies affecting income distribution.

This study represents the past six years of my research on income distribution and draws heavily upon a number of my articles both published and forthcoming. My interest in the field was first aroused in 1971 through discussions with Nripesh Podder in connection with his Ph.D. thesis. I later collaborated with him on several studies on income distribution financed by the Reserve Bank of Australia, the Australian Taxation Review Committee, and the Poverty Inquiry Commission. But the major research for this book was done at the Development Research Center of the World Bank, where I spent my sabbatical leave from July 1974 to February 1976.