Distribution of Household Income in America: Effects of Source of Income, Inflation, and Cost of Living Differentials

  • Mohamed Abdel-Ghany
  • Stephen J. Thoma
Part of the Social Indicators Research Series book series (SINS, volume 17)


This study focuses on four aspects of the inequality of average household income among the American states. First, we document change in the inequality of nominal average household income between 1979 and 1990. Second, we identify states contributing to the observed inequality. Third, we examine the pattern in state income convergence-divergence when spatial and temporal state price differentials are accounted for. Fourth we provide estimates of impacts of alternative income components on income inequality. We find that inequality in real income is smaller than that in nominal income. Also, we conclude that traditional income measures that exclude transfer payments and other types of income overstate inequality.


Household Income Income Inequality Labor Income Real Income Transfer Payment 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Coughlin, C. C. and T. B. Mandelbaum: 1988, ‘Why have state per capita incomes diverged recently?’, Review of the Federal Reserve Bank of St. Louis 70, pp. 24–36.Google Scholar
  2. 2.
    Abdel-Ghany, M.: 1991, ‘Income inequality within the U.S.A.: with emphasis on the “South”’, Journal of Consumer Studies and Home Economics 15, pp. 339–345.CrossRefGoogle Scholar
  3. 3.
    Abdel-Ghany, M.: 1996, ‘Demographic and economic determinants of household income polarization among the states of America’, Family Economics and Nutrition Review 9, pp. 14–23.Google Scholar
  4. 4.
    Al-Sammarie, A. and H. P. Miller: 1967, ‘State differentials in income concentration’, American Economic Review 57, pp. 59–72.Google Scholar
  5. 5.
    Aigner, D. J. and A. J. Heinz: 1967, ‘On the determination of income inequality’, American Economic Review 57, pp. 175–184.Google Scholar
  6. 6.
    Braun, D.: 1988, ‘Multiple measurements of U.S. income inequality’, The Review of Economics and Statistics 70, pp. 398–405.CrossRefGoogle Scholar
  7. 7.
    Conlisk, J.: 1967, ‘Some cross-state evidence on income inequality’, The Review of Economics and Statistics 47, pp. 115–118.CrossRefGoogle Scholar
  8. 8.
    Frech, H. E. and L. S. Burns: 1971, ‘Metropolitan interpersonal income inequality: a comment’, Land Economics 47, pp. 104–106.CrossRefGoogle Scholar
  9. 9.
    Jonish, J. E. and J. B. Kau: 1973, ‘State differentials in income inequality’, Review of Social Economy 31, pp. 179–190.CrossRefGoogle Scholar
  10. 10.
    Levernier, W., D. S. Rickman and M. D. Partridge: 1995, ‘Variation in U.S. state income inequality: 1960–1990’, International Regional Science Review 18, pp. 355–378.Google Scholar
  11. 11.
    Nelson, J. I.: 1984, ‘Income inequality: the American states’, Social Science Quarterly 65, pp. 854–860.Google Scholar
  12. 12.
    Nord, S.: 1984, ‘An economic analysis of changes in the relative shape of the interstate Size distribution of family income during the 1960s’, The American Economist 28, pp. 18–25.Google Scholar
  13. 13.
    Rice, G. R. and T. S. Sale: 1975, ‘Size distribution of income in Louisiana and other southern states’, Growth and Change 6, pp. 26–33.CrossRefGoogle Scholar
  14. 14.
    Rowley, T. D., J. M. Redman and J. Angle: 1991, ‘The rapid rise in state per capita income inequality in the 1980s: Sources and prospects’, Staff Report AGES 9104 ( USDA, Agriculture and Rural Economy Division, Washington, DC ).Google Scholar
  15. 15.
    Ruthenberg, D. and M. Stano: 1977, ‘The determinants of interstate variation in income distribution’, Review of Social Economy 35, 55–66.CrossRefGoogle Scholar
  16. 16.
    Sale, T. S.: 1974, ‘Interstate analysis of the size distribution of family income, 1950–1970’, Southern Economic Journal 40, pp. 434–441.CrossRefGoogle Scholar
  17. 17.
    Slottje, D. J.: 1990, ‘Changes in the U.S. income distribution from 1970 to 1980: assessing state and regional impacts’, The Journal of Human Resources 25, pp. 267–274.CrossRefGoogle Scholar
  18. 18.
    Young, R. and J. Moreno: 1965, ‘Economical development and social rigidity: a comparative study of forty-eight states’, Economic Development and Social Change 13, pp. 439–452.CrossRefGoogle Scholar
  19. 19.
    Fei, J. C. H., G. Ranis and S. W. Y. Kuo: 1978, ‘Growth and the family distribution of income by factor components’, Quarterly Journal of Economics 92, pp. 17–53.CrossRefGoogle Scholar
  20. 20.
    Lerman, R. I. and S. Yitzhaki 1985, ‘Income inequality effects by income source: a new approach and application to the United States’, The Review of Economics and Statistics 67, pp. 151–156.CrossRefGoogle Scholar
  21. 21.
    Kakwani, N. C.: 1980, Income Inequality and Poverty: Methods of Estimation and Policy Applications (Oxford University Press, London).Google Scholar
  22. 22.
    Kusnic, M. W. and J. Davanzo: 1986, ‘Accounting for non-market activities in the distribution of income: an empirical investigation’, Journal of Development Economics 21, pp. 211–227.CrossRefGoogle Scholar
  23. 23.
    Pyatt, G., C. Chen and J. C. H. Fei: 1980, ‘The distribution of income by factor components’, Quarterly Journal of Economics 95, pp. 451–473.CrossRefGoogle Scholar
  24. 24.
    Shorrocks, A. F.: 1982, ‘Inequality decomposition by factor components’, Econometrica 50, pp. 193–211.CrossRefGoogle Scholar
  25. 25.
    Shorrocks, A. F.: 1983, ‘The impact of income components on the distribution of family incomes’, Quarterly Journal of Economics 97, pp. 311–326.CrossRefGoogle Scholar
  26. 26.
    Bishop, J. A., J. R Formby and P. D. Thistle: 1994, ‘Convergence and divergence of regional income distribution and welfare’, The Review of Economics and Statistics 76, pp. 228–235.CrossRefGoogle Scholar
  27. 27.
    Deller, S. C., M. Shields and D. Tomberlin: 1996, ‘Price differentials and trends in state income levels: a research note’, The Review of Regional Studies 26, pp. 99–113.Google Scholar
  28. 28.
    Ram, R.: 1992, ‘Interstate income inequality in the United States: measurement, modelling, and some characteristics’, Review of Income and Wealth 38, 39–48.CrossRefGoogle Scholar
  29. 29.
    Ram, R.: 1995. ’“Nominal” and “real” interstate income inequality in the United States: some additional evidence’, Review of Income and Wealth 41, pp. 399–404.CrossRefGoogle Scholar
  30. 30.
    Woods and Poole Economics: 1997, Complete 1997 Economic and Demographic Database on CD-ROM: Technical Documentation (Woods and Poole Economics, Inc., Washington, D.C.).Google Scholar
  31. 31.
    McMahon, W. W.: 1991, `Geographical cost of living differences: an update’, Journal of the American Real Estate and Urban Economics Association 19, 426–450.CrossRefGoogle Scholar
  32. 32.
    U.S. Department of Labor, Bureau of Labor Statistics (1998). Web site:

Copyright information

© Springer Science+Business Media Dordrecht 2002

Authors and Affiliations

  • Mohamed Abdel-Ghany
    • 1
  • Stephen J. Thoma
    • 1
  1. 1.The University of AlabamaUSA

Personalised recommendations