Determinants of income and its distribution in four villages in India

A MODEL IS PRESENTED IN WHICH INCOME IS A FUNCTION OF THE DISTRIBUTION AND VALUES OF THESE ASSETS. THE ARTICLE CONTAINS TWO MAJOR COMPONENTS: AN ANALYSIS OF THE DETERMINATION OF EACH HOUSEHOLD"S INCOME AND AN ANALYSIS OF THE DISTRIBUTION OF HOUSEHOLD INCOMES WITHIN THE VILLAGES. FOUR VILLAGES WERE SURVEYED. THE COMMON CHARACTERISTICS OF THE VILLAGES WERE: (1) THEY WERE DEVELOPING ECONOMICALLY, (2) THE IRRIGATED AREA INCREASED SUBSTANTIALLY IN EACH OF THE VILLAGES, (3) ALL WERE THE OBJECTS OF GOVERNMENT DEVELOPMENT PROGRAMS, AND (4) THREE OF THEM WERE NEAR ENOUGH TO A CITY OR TOWN THAT SOME RESIDENTS COULD COMMUTE TO URBAN JOBS. SIMPLE LINEAR REGRESSIONS ON VARIABLES REPRESENTING LAND, LABOR, EDUCATION, AND MILCHSTOCK ACCOUNT FOR 36% TO 87% OF THE VARIANCE IN HOUSEHOLD INCOMES PER CAPITA. THE INFLUENCE OF CASTE IS FOUND TO BE PRIMARILY INDIRECT. THE ROLE OF ECONOMIC FACTORS VARIED GREATLY WITH OCCUPATION. IN THE SECOND PART OF THE PAPER, AN ORIGINAL METHOD, BASED ON CORRECTION FOR THE SYSTEMATIC ACCUMULATION OF ERRORS, REFINES THE ESTIMATED INCOME DISTRIBUTION OBTAINED FROM THE SET OF REGRESSION EQUATION PREDICTIONS FOR INDIVIDUAL HOUSEHOLDS. INEQUALITY OF LAND DISTRIBUTION IS SHOWN TO BE THE ONLY IMPORTANT FACTOR IN EXPLAINING INCOME INEQUALITIES. THE INCOME DISTRIBUTION EFFECTS OF A HYPOTHETICAL LAND REFORM ARE SIMULATED.