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Distribution (economics)
Distribution in economics refers to the way total output, income, or wealth is distributed among individuals or among the factors of production (such as labour, land, and capital).〔Paul A. Samuelson and William D. Nordhaus (2004). ''Economics'', 18th ed., () Glossary of Terms, "Distribution."〕 In general theory and the national income and product accounts, each unit of output corresponds to a unit of income. One use of national accounts is for classifying factor incomes and measuring their respective shares, as in National Income. But, where focus is on income of ''persons'' or ''households'', adjustments to the national accounts or other data sources are frequently used. Here, interest is often on the fraction of income going to the top (or bottom) ''x'' percent of households, the next ''y'' percent, and so forth (say in quintiles), and on the factors that might affect them (globalization, tax policy, technology, etc.).
==Descriptive, theoretical, scientific, and welfare uses==
Income distribution can describe a prospectively observable element of an economy. It has been used as an input for testing theories explaining the distribution of income, for example human capital theory and the theory of economic discrimination (Becker, 1993, 1971).
In welfare economics, a level of ''feasible'' output possibilities is commonly distinguished from the distribution of income for those output possibilities. But in the formal theory of ''social'' welfare, rules for selection from feasible distributions of income and output are a way of representing normative economics at a high level of generality.
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