FUNCTIONAL AND SIZE DISTRIBUTIONS OF INCOME AND THEIR MEANING.

It is increasingly realized during the past few years that the relative income position in a given year is only one element in determining the level of living. Therefore there is a growing tendency to place less emphasis on the degree of inequality and more on the underlying forces which are mirrored in changes in income-size distributions. In trying to account for cyclical and secular chains in income-size distributions it is logical to seek in the composition of income by type one of the major explanatory variables. Distribution theory deals with functional shares in national income. The author here first discuss some problems involved in relating income-size distributions to distributions by type and then raises some questions on the interpretation of income-size distributions. Much of the early research into income-size distribution was focused on measurement rather than interpretation. In conclusion of the article the author remarks that studies on income-size distributions in foreign countries seem to indicate that the trend toward greater equality manifests itself in such diverse economies as Great Britain and Brazil.