Overview And Importance Of Distribution Of Income

3261 words - 13 pages

Distribution of income in any given economy is known as how the income is allocated between households. This phenomenon is not to be confused with distribution of wealth which looks at the ownership of assets in an economy, as opposed to the income. The topic of income distribution is a very hot subject due to the perceived income inequality in the United States. It is talked about on a daily basis on almost every political talk show, news program, business news show, and the list goes on. The reason for it being such a controversial subject is because the income distribution in an economy affects every single person in that economy. There are many methods of gathering information, compiling it and analyzing the data. There are also many ways to manipulate or affect the distribution of income, whether it is done naturally or done deliberately in order to achieve a certain outcome. The analysis also provides information on how certain actions affect income distribution and may give clues as to how to prevent a large gap in income inequality, or correct the gap. Sometimes the data can give clues as to whether the government should tighten the regulations in certain industries or loosen up on them, and much like every other subject the government gets involved with, there are many people who support government intervention, but there are also many people who oppose it. Each side makes a compelling case in support of their views. A general study of income distribution will help further understand how decisions are made in an economy as well as helping to prevent income inequality or fix the gap between the rich and the poor.
Distribution of income is normally compiled and divided up in five groups known as quintiles. The quintiles include everyone in a household whether or not they are actual relatives. The bottom quintile is considered to be poor, the next three quintiles are labeled as middle class and the highest quintile is known as the rich (Arnold 2011). It is important to specify that the quintiles are not divided by equal parts of the population, but are divided by households and the total income of each household. If the quintiles were divided evenly by the population, the results would be different, and in many cases you would see a rise in income to the lower fifth and a fall in income to the highest fifth (Arnold 2011). Referring to Figure 1 which shows the total aggregated income in 2005 to include money income, market income, post social insurance income, and disposable income, it is easy to visualize the distribution of income for 2005 (Current Population Survey, 2007). According to Figure 1, the lowest quintile took in 3.42% of the national money income in the United States while the highest quintile took in 50.34% of the national money income. Collectively, the middle class earned 46.24% of money income, which is to include the lower middle class, as well as the upper middle class (Current Population Survey,...

Find Another Essay On Overview and Importance of Distribution of Income

Locke and Hume on Inequalities of Distribution

1206 words - 5 pages Discuss, compare and contrast the ways in which Locke and Hume defend inequalities of distribution. Does either offer a more convincing defence? Why? This essay seeks to examine the inequalities of distribution of resources and the defences of these inequalities provided by John Locke, in Of Property , and David Hume in Of Justice . Both writings set out the scene in which their theories would evolve. Locke starts with the idea that

The Production and Distribution of Oil Products

2273 words - 9 pages Ports can be considered clusters of economic activity (Tongzon, 2002). One of the facilities that is often found in ports is the production and distribution of oil products. The oil products that I will be taking into consideration in this assessment are: gasoline, diesel fuel, jet fuel, kerosene, liquefied petroleum gas, and fuel oils. This list represents refined oil products, not crude oil. The factors that are going to be presented in the

Price, Income and Cross Elasticity of Demand

1482 words - 6 pages Explain what is meant by the terms price elasticity, income elasticity and cross elasticity of demand and discuss the main determinants of each of these. Discuss the importance of each of these to the decision making process within a typical business.Elasticity is the responsiveness to which one variable responds to a change in another variable Price elasticity of demand (PED) measures the responsiveness of quantity demanded of a product to a

“an Overview Of The Current And Future Importance Of Oil In The World In Terms Of Energy And Resources”

1536 words - 6 pages "AN OVERVIEW OF THE CURRENT AND FUTURE IMPORTANCE OF OIL IN THE WORLD IN TERMS OF ENERGY AND RESOURCES"PART 1Crude Oil, 'Black Gold' as it is popularly known is perhaps the single most important source of energy that is finite and will soon run out. The main sources of this oil are the wells of Saudi Arabia, Iraq, Iran, Canada, USA, Kuwait, and so on. Fossilized remains of plants and animals that lived millions of years ago, were subjected to

The Distribution Strategy of the Product in the UK Market and Types of Distribution Channels Utilized

1599 words - 6 pages merchant suppliers takes off an enormous amount of pressure of distribution, as this will be done for the company. In addition, the company can also reduce the level of storage space necessary to hold stock. Selling to larger organisation would mean more reliable income of capital and a more stable business for you.( Blythe, 2008)A combination of all the distribution methods could be chosen to maximize the level of distribution. When distribution has

Unequal Distribution Of Wealth

1500 words - 6 pages factors that contribute to the problem. Such factors include education, social standing, position held in work place, living location, and life background. There are several ways to compensate for the factors that cause the unequal distribution of wealth, which include a welfare system, social security, health care, and John Galbraith?s idea of giving each family a minimum income that allows them to participate in the economy. Karl Marx also

Channels of Distribution

704 words - 3 pages The channels of distribution of a product or service are often referred to as the "place decision" in regards to the four P's of the marketing mix. The four P's stand for Product, Price, Place, and Promotion. The "place" refers to the location from which the product or service is being distributed. The method of distribution depends on the product or service that is being provided to the end user. There are multiple methods of distribution and

Channels of Distribution: McDonald's

876 words - 4 pages Introduction.The core of this presentation is to discuss the theory of distribution strategy with the underlying real life examples of McDonald's fast-food restaurants. The aim is to discuss McDonald's distribution channel and the way in which this fast-food restaurant chain gets its products to the market. In the theory of the Marketing Mix, place (distribution) determines where the product will be sold and how it will get there. In fact, as

Distribution Of Wealth

1295 words - 5 pages Distribution of Wealth If all the wealth in the United States of America were to be distributed amongst all the citizens equally, I believe in time, the money would eventually go back to the way it was distributed originally. I think that it would take longer than five years for this process but within the five years the shift would already be noticeable. The wealthy would slowly be able to regain their wealth from the poor and the poor would

Distribution of Virtual Marketing

582 words - 2 pages Since the introduction of the World Wide Web in 1990 it has grown from a means of communicating for physicists to having more than forty million users. This tremendous growth and interest in the Internet can only mean that great opportunities lie ahead for companies and their products.Digital marketing is changing how businesses are able to get their product to the consumer. It is allowing the channels of distribution to become shorter. In order

Channel of Distribution

743 words - 3 pages Channel of distribution can be defined as a mechanism or tool through which goods and or services are moved from the manufacture and or service order to the end buyer or consumer. Managing a multichannel business in today's competitive environment can be a tremendous challenge. US Cavalry found it essential to concurrently market within and across every available channel, through internet, retail store, and catalog sales.US Cavalry is a

Similar Essays

The Distribution Of Income And Wealth

969 words - 4 pages Society has a problem with the distribution of wealth and income. Traditionally philosophers agree that the distribution of wealth within a limited society is considered a problem of distributive justice. Over time there has been a collection of solutions recommended about how much income and wealth people deserve or have a right to possess. Distributive justice has appealed to political ideals as well as the ideas of socialists, libertarians

An Overview Of Income Inequality In The United States

2267 words - 9 pages A Brief OverviewOf Income InequalityIn the United StatesI. IntroductionIncome distribution has been critical issue in American society; more and more reports show that the inequality of income has dramatically increased in the last few decades, while the United States' Western European Counterparts are reportedly equal in terms of income distribution.1 When comparing the United States to European countries, America lags behind in terms of income

Diversity And Distribution Of Eucalyptus Essay

4588 words - 18 pages Diversity and Distribution of Eucalyptus Eucalyptus is a genus of hardwood evergreen forest trees, and is the most conspicuous element of Australian vegetation. Its members constitute 95 percent of the continent's forests and are the dominant trees of Australia's woodlands (Kelly 1969). It is an extremely diverse group, with approximately 500 named species and subspecies and nearly 200 described hybrid varieties (Blakely 1965). The genus is

Overview Of The Importance Of Intrinsic Rewards At Work And School

2159 words - 9 pages goals result in a higher level of individual performance than do moderate goals. However, even in such programs, individual differences must be considered before reaching conclusions about the importance of achievement rewards. The third element is autonomy. Some people want jobs that provide them with the right and privilege to make the decisions and operate without being closely supervised. A feeling of autonomy could result from the freedom