Income distribution
Dr Graham Richards
6 points * Two 1_-hour lectures per week * First or second semester * Clayton * Prerequisites: ECO1020 and ECO1030, or ECO1100 and ECO1110
Objectives On completion of this subject students should understand the different meanings that can be attached to the term income distribution; understand the concept of income as defined by an economist and how this may differ from the definition used by accountants, statisticians and taxation authorities; recognise and distinguish between the various measures of dispersion in incomes; understand the concept of wealth and recognise why wealth is typically more unevenly distributed than income; understand the different theories developed to explain differences in the personal distribution of income and wealth; recognise the nature of policies designed to provide for a more equitable distribution of income and wealth.
Synopsis Conceptual problems involved in the definition and measurement of income and the difficulties experienced in determining the extent of inequality in the distribution of incomes; statistical material relating to inequality in the distribution of income and wealth in Australia; explanations of the distribution of income, including stochastic theories which concentrate on the role of chance, human capital theory which points to the systematic influence of education and on-the-job training, and multi-factor theories which incorporate abilities and opportunities and the factors that lie behind these, such as socio-economic background and the possible heritability of IQ; policies designed to redistribute income and wealth.
Assessment Written (1500-word essay): 20% * Examination (2 hours): 80%
Prescribed texts
Atkinson A B The economics of inequality 2nd edn, OUP, 1983